Potential gap between what retirement village operators charge residents and the actual cost could hit retirees for up to $138 million, retiree rights advocate writes.
Residents at retirement villages operating under Victoria’s Retirement Villages Act 1986 (RV Act) are being charged more for village maintenance and management — the service charge — than what the law requires.
This occurs where operators deny residents the statutory right to choose to pay a service charge from two separate values — the service charge as proposed by the operator, or an independently calculated benchmark value.
According to the legislation, residents are not required to pay a monthly service charge higher than this independently calculated, CPI-compounding benchmark value — unless the residents agree to do so (except for the first year. The service charge is based on the operator’s estimated operating costs for maintenance and management of the village for the new village year; the benchmark value compounds each year using the % change in the Australian Bureau of Statistics Table 9 Melbourne CPI index.
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