Retirement village regulation lacking, residents open to exploitation

ABC News reports:-

"Residents in the nation's retirement villages are being left vulnerable to exploitation by a hotchpotch of legislation, regulation and underfunded consumer affairs bodies.

Key points:

• Retirement village residents are not in any federal minister's portfolio


• Several people say they've had trouble selling property


• Concerns raised over dense contracts, high fees and lack of resources to instigate change

A joint investigation by the ABC's Four Corners and Fairfax Media into retirement village company Aveo has found that residents are slipping through the regulatory cracks.

They are not in any federal minister's portfolio and a series of recommendations and reforms that came out of an inquiry into the sector a decade ago were never implemented.

Tim Allerton, a hardnosed crisis management professional and PR expert, believes his aunt was taken for a ride by Aveo after she was forced to move out of a unit in Aveo's Lindfield Gardens village in Sydney after she got sick.

Mr Allerton's aunt Joan Buswell bought the property in 2008 for $250,000.

It was only when she died that Mr Allerton realised the contract she had signed and how difficult it would be to sell the property.

"The original lease contract was 172 pages, and it contained very dense definitions, charges and so forth, and perhaps at our fault, we didn't investigate it as heavily as we should have," Mr Allerton said.

"But we were looking for accommodation for her at the time, and that was our main priority."

The joint ABC investigation spoke to numerous current and former residents, their children, lawyers, former Aveo staff and lobby groups, and found some questionable business practices.

The bodies that are supposed to protect the residents, NSW Fair Trading and Consumer Affairs Victoria, do not have enough powers.

Mr Allerton said he put the unit on the market after his aunt became sick, appointing Aveo as the real estate agent.

Then after his aunt died in early 2013 it became more urgent to sell the unit and wrap up the estate, particularly given the family were being charged monthly maintenance fees.

"The maintenance fees, despite the fact she'd passed away at that time, were around $10,000 to $13,000 for each year, so it was just eating a hole in our pockets," Mr Allerton said.

'They weren't even showing the apartment'

Finally, the family dropped the sale price from $270,000 to $199,000, but still it did not sell.

So the family decided to investigate.

"What we did discover in a range of visits that we undertook was that the agents weren't even showing people the apartment," he said.

"There was dust on the floor and on the fixtures and fittings, as well as a very musty smell in the apartment."

The unit finally sold two-and-a-half years after being put on the market at a 20 per cent discount to the purchase price of $250,000.

After exit fees and other fees, including agency fees, Aveo cut a cheque for $94,000.