Amend Retirement Village Legislation

Amend Retirement Village Legislation, long time advocate for reforms to the Victorian Retirement Village Act 1986 Charles Adams has penned a letter to Dr. Maree Petersen, a senior lecturer in Social Work at the University of Queensland.

Dr. Petersen led a University of Queensland School of Nursing, Midwifery and Social Work study into retirement villages  https://www.uq.edu.au/news/article/2017/12/you-can-check-out-any-time-you-you-can-never-leave .

Mr. Adams in his letter asks Dr. Petersen to give greater weight to a Victorian legislation problem which has permeated the industry.

"By far the most important deficiency of retirement villages in Australasia is the definition of a village legislated in Victoria in their RV Act 1986. That mandates entry requires the prepayment of an ingoing contribution also called a donation.

The resulting contracts are so skewed in the developer/operators favour that that model has been adopted Australia wide regardless of all other states and territories legislation.

That contract model does three things

1. Generates very complex contracts that are incomprehensible to, in my estimate, over 90% of all lessees, also called residents. Those contracts are a very serious impediment to many people considering villages and results in a very low uptake of 5.7% of the over 65 demographic, across Australia. This figure is quoted by the Property Council of Australia at a meeting I attended earlier this year. That compares with 15% in the US where conventional residential tenancy contracts apply, and are well understood


2. Frontloads the monthly equivalent rental rate into the first few years of contracts, which makes it effectively a ransom that prevents some dissatisfied lessees ability to leave. They can no longer afford to go into other comparable downsized housing.


3. This contract model hides the very high effective rental rate. It hides it by making it impractical to calculate because of all the variables and time spread across the duration of contracts."

Mr. Adams proposes a change to the legislative definition of a retirement village as below,

Proposed definition for a Victorian Retirement Village.

1. Retirement village means a group of leased, with secure tenure residential tenancy dwellings, forming a community, the majority of which is retired persons, with all services for the common property included in the rental price.


2. Residential tenancy contracts, with monthly rentals are mandatory. Other contract models may be offered optionally.

This would make it compulsory for retirement village operators to offer a residential tenancy contract being the most transparent as to pricing and the most easily understood by retirees, families and professional advisors.

Amend Retirement Village Legislation



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