Retirement Village Operators Cry Poor

Retirement Village operators continue to cry poor to organisations such as Consumer Affairs Victoria seeking and being granted relaxed rules on the payment of aged care bonds where a village resident moves to an aged care facility.

In a lease/licence village the operator receives an interest free loan from the resident for the cost of obtaining the lease less the so called 'deferred fee' which the operator retains.

The village operator is actually claiming that when a resident leaves they (the operator) are in such a poor working capital position that they need relief from giving back the resident their own money, money the operator has had the use of interest free for the duration of their occupancy. An important point here is to remember that in a loan/licence village residents have no ownership of the property, only a lease granting a right to reside in this property but for which they pay an amount in the order of the cost of owning a residential unit within the general community.

Why on earth would someone looking for a downsize in residential accommodation following retirement sign up for such a scheme. That is a very good question and one that every older Australian contemplating entering a retirement village must ask themselves. Why would I pay the equivalent cost of ownership when I won't own it only lease it.

The following table presents the basis of _ Why would I do it?   The subsequent table indicates is a village operator actually in such a poor financial position.