Tuesday, June 23, 2020

Retirement Village Deception


The great retirement village deception, the use of words like 'buy' and 'purchase' deceive the retiree
into believing an exchange of ownership will take place. In fact the retiree has merely made a 'loan' to the operator at 0% interest. This loan on far too many occasions is equivalent to or near to equivalent to the purchase value of a similar standard unit with the generally community.

The loan has three key features all detrimental to the retiree,
  1. Village residents can lose as much as 40% of the original 0% loan amount through a poorly named 'Deferred Management Fee', this fee is accumulated over the initial years of occupancy.
  2. Inflation over the period of occupancy can devastate the $ value of the refundable amount of the original loan. (The refundable amount being the value of the initial loan minus the value of the deferred management fee.)
  3. Outgoing residents can wait weeks, months to get back the refundable portion of their loan after their departure from the village.

Loan/Lease Retirement Village - Resident Funded – 74% of the marketplace

  • Development of the village funded by the retirees with 0% loans to developer/owner.

  • Retiree loans a $ sum, in the order of a 'buy' price, at 0% interest to the developer/owner in exchange for conditional occupancy, not ownership.

  • Village residents despite only occupancy not ownership, pay all the management costs, maintenance costs, municipal rates, renovation costs, selling costs.

  • Village residents despite only occupancy not ownership, can lose as much as 40% of the original 0% loan amount through a poorly named 'Deferred Management Fee', this fee is accumulated over the initial years of occupancy.

  • The shorter the occupancy period the more devastating the Deferred Management Fee becomes on the $ amount of the refundable portion of the 0% loan.

  • The longer the occupancy the more devastating inflation becomes on the $ value of the refundable portion of the 0% loan.

  • In the order of 50% of developers/owners deny retirees access to any unit capital gain.

  • Enforced by legislation retirees can wait weeks, months to get back the refundable portion of their loan after their departure from the village.


Friday, June 12, 2020

Fundamental Problems With Retirement Income System

YourLifeChoices reports - Biggest trap for retirees? Our entire retirement income system

YourLifeChoices states, "Australia must confront fundamental problems with its retirement income system."


Noting in their article the following major points -
  • "Of the 36 OECD (developed) countries, Australia has the sixth highest rate of poverty in retirement."
  • "Super tax concessions are worth $41 billion per year. The richest 20 per cent of retirees get 60 per cent. The bottom half get just 11 per cent."
  • "The cost of super tax concessions will soon be larger than the cost of the Age Pension."
See full article here at this link - https://www.yourlifechoices.com.au/retirement/retirement-income/money-going-to-the-wrong-people


Tuesday, June 2, 2020

Money For Social Housing

The Grattan Institute reports - Money for social housing, not home buyers grants, is the key to construction stimulus.

"There’s a better way to support residential construction without providing such big windfalls to developers: fund the building of more social housing.Social housing – where rents are typically capped at no more than 30% of household income – provides a safety net to vulnerable Australians.
In particular, the Morrison government should repeat another GFC-era policy, the Social Housing Initiative, under which 19,500 social housing units were built and another 80,000 refurbished over two years, at a cost of A$5.2 billion."

www.retvill.net

Social Housing Demands

Friday, June 22, 2018

Stand And Deliver From Bishop Parkes


The residents of Alexandra in Victoria believe the phrase 'stand and deliver' is alive and well in 2018 but the surprise is that the order is coming from a Bishop of the Anglican Church.

Bishop John Parkes from the Diocese of Wangaratta is leading a move to forcibly merge the Kellock Lodge aged care facility in Alexandra with the St. Johns aged care facility in Wangaratta. Both the facilities are in the Diocese of Wangaratta.

At a standing room only public protest meeting held in the Alexandra town hall, over 300 residents of the community expressed outrage at what was taking place. Some 30 years ago a local family donated land to the Anglican Church for the purpose of caring for the elderly of the district. The church was not asked to provide any funds for the development of the facility and it never did. The church has never been asked for any money over the following 30 years and it has never given.

At the public meeting speakers stated that the facility in Wangaratta is in a financially precarious position and the motive for the move is to incorporate a stated nine million dollars held in cash assets by the Alexandra facility.

The residents of Alexandra are fearful the Diocese of Wangaratta may have the legal rite to take such action but the morality of a christian organisation making such a move came under heavy criticism at the public meeting.

The meeting unanimously voted:-
A. That this public meeting of the Alexandra community rejects any moves to shift control and management of Kellock Lodge and its assets out of Alexandra into a new new company based in Wangaratta.
B. That this public meeting requests the Kellock Board to investigate whether any avenues exist for the transfer of the land to an appropriate community based entity.

From the mood of the meeting it seems clear the name Bishop John Parkes will never be forgotten in Alexandra but for all the wrong reasons. All Churches are struggling to maintain public relevance in the modern world, the Anglican church in Alexandra may suffer a community backlash from which it does not recover.


Tuesday, May 22, 2018

Retirement Village Residents Making Your Complaint Count



Retirement village residents making your 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 Center, Residents 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 such as an Ombudsman that failed them most.    Retvill.net.

Retirement Village Residents Making Your Complaint Count

Sunday, May 20, 2018

Retirement Village Residents - The Power Of One

Retirement Village Residents - Making Your 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 were 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.

March 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 and the potential cost to residents from the breach of law by the operator was potentially in the order of two million dollars plus. The operator would receive a 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 compliance.

May 2017 - The resident wrote directly to the Board of Governors as evidence continued to come to light that the matter had still not been corrected. The Board of Governors did not respond to the letter.

April 2018 - The resident wrote again and met with the new chairperson of the Board of Governors raising the matter and the substantial financial penalty flowing to the residents resulting from the breach of the Retirement Villages Act 1986 by the operator. The chairperson advised the matter would be raised with Board.   The Board of Governors and upper management had been transformed following suspension of aged care accreditation stemming from an influenza outbreak in the attached 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 Center, Residents 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, to 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.