“An ongoing source of contention between retirement village residents and operators is the difference between the terms reinstatement and refurbishment.
‘Reinstatement’ refers to the repairs necessary to bring a unit to the same condition as when the resident moved in; ‘refurbishment’ refers to works that improve the unit beyond that level.
Although retirement village contracts stipulate what residents must do on departure, evidence received by the Committee suggests that many residents do not fully understand this part of their contract.
A view also exists that when residents pay for refurbishment village owners benefit through receiving a percentage of an increased sale price.”
Ms Rachel Lane, Author and Principal of Aged Care Gurus made the following statement to the committee:-
“There tend to be two words that the industry use which sound very similar but have very different connotations. The industry use ‘reinstatement’ and ‘refurbishment’. Reinstatement is what most people think refurbishment is, which is basically put it back the way you found it — so a lick of paint, any damage that you have done repaired and steam cleaning carpets. Refurbishment means bring it up to today’s standard, whatever that standard is. People do not understand that those two words have very, very different connotations…
…for a prospective resident you are talking about a difference in reinstatement of $1500 or $2000, something like that, versus refurbishment, which can easily be $60 000 by the time you pull out all the carpet and put in a new kitchen and a new bathroom. So it is very different.”
Prospective Retirement Village residents need to fully understand whether their contract requires unit reinstatement or unit refurbishment on their eventual departure from the retirement village.
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