Retirement Villages - What is really wrong.

What is really wrong with retirement villages particularly in Victoria.

This actual example surely epitomises what is wrong with the retirement village industry, particularly in Victoria.

1. Retirement village operator breaches the legislated provisions of the Retirement Villages Act 1986.


2. Action taken by Consumer Affairs Victoria - Don't do it again !!


3. Outcome - Operator plus $1.5 million dollars, Residents minus $1.5 million dollars.

Advice to operators from Consumer Affairs in their document to retirement village operators following a change in the law effective July 1 2014.

"Under the Act, it is an offence to include a statement that you know to be false or misleading in a material particular either in the factsheet or disclosure statement.

Additionally, under the Australian Consumer Law, it is an offence to make false or misleading representations about goods or services, and you may also be subject to civil claims for misleading or deceptive conduct."

Following the change in the law the village operator failed to issue a fact sheet for an extended period and then once issuing a fact sheet, again for an extended period, advised prospective residents that they were not responsible for the 'refurbishment' of their unit on departure from the village but the contract executed states that they are.

The monetary effect on residents from inaction by Consumer Affairs Victoria to hold the operator accountable under the law is that the affected residents will be out of pocket in the order of $1.5 million dollars increasing each year as refurbishment costs increase each year.

The monetary effect for the village operator from inaction by Consumer Affairs Victoria is that the operator will receive revenues in the order of $1.5 million dollars  increasing each year as refurbishment costs increase each year.

All this as a result of the operator breaching the provisions of the Retirement Villages Act 1986 and the failure of Consumer Affairs Victoria to protect these residents despite CAV being responsible for the application of the applicable law.

Everything talked about, contracts, deferred fees etc. drifts into the background for these residents when you can have a circumstance where a retirement village operator breaches the Act, is advanced by $1.5m dollars while the residents are out of pocket by $1.5m dollars and the regulator simply says, 'don't do it again'.

So what is really wrong with retirement villages in Victoria, Consumer Affairs Victoria.

If the law was administered as the legislators intended then retirement village operators in Victoria would be held to account and both current and prospective residents could have confidence that applicable law would be applied to both themselves and the operator with equal weight.