Andrews Government Inaction on Retirement Village Reforms

Andrews Government Inaction on Retirement Village Reforms - The Victorian Daniel Andrews government is dragging the chain with retirement village reforms.

Despite a 2016 inquiry htp://www.retvill.net/vic-government, recommendations in early 2017 then a government response to the recommendations, no major action has been taken to reform retirement villages in Victoria.

The inquiry, recommendations and response have been described as - left disappointed, no commitment, lost opportunity, evidence ignored, concerns dismissed, a damp squib, fillip to developers, brush-off to residents.

"Residents and their families will ultimately pay the price for the Victorian Government’s inaction on retirement housing reform''

Comments attributable to:

Gerard Brody, CEO Consumer Action Law Centre

• If you’re an older Victorian and want to resolve a problem with your retirement living, it should be cheap, quick and accessible. The evidence has shown that we need an ombudsman scheme for this sector.


• Recent piecemeal inquiries by the Victorian Government into the sector have failed to reduce the complexity of contracts or improve outcomes for residents. We had hoped for a strong response from the Government today that showed it cared for residents and their families. Unfortunately, we were left disappointed.

Lawrie Robertson, Vice-President Residents of Retirement Village Victoria

• There is no commitment in the Victorian Government’s response to improving the rights and protections for residents.


• Our members had hoped for quick implementation of a simple, free, binding dispute resolution service and they have been left bitterly disappointed.

Ronda Held, CEO COTA Victoria

• This is a lost opportunity for leadership in responding to the concerns of thousands of older Victorians and their families.


• The Victorian Government had overwhelming evidence of the problems in this sector, and that evidence has been ignored.

Fiona York, Co-Manager, Housing for the Aged Action Group

• None of the main concerns of residents have been adequately dealt with.


• Residents’ concerns about unfair and confusing fees, management practices and dispute resolution have been either dismissed or deferred.

Levitt Robinson solicitors

• The report of the Victorian Enquiry into the Retirement Housing Sector has proven to be a damp squib and disappointed many genuinely aggrieved Victorian residents of retirement villages.


• The enthusiasm with which it was greeted by the Property Council of Australia’s Victorian Division, when it was released on 7 March 2017, is a strong indication that it was a fillip to developers and brush-off to resident retirees.

Andrews Government Inaction on Retirement Village Reforms



 

Morning Tea with Vic Pollies

Morning Tea with Vic Pollies

"WE'VE HAD THE INQUIRY, NOW WE NEED RETIREMENT HOUSING REFORM!

JOIN US FOR MORNING TEA AT PARLIAMENT HOUSE ON 30 NOVEMBER TO HEAR FROM YOUR MP AND THEIR PLANS FOR RETIREMENT HOUSING.

MAKE SURE YOU CALL YOUR MP AND INSIST THEY ATTEND THIS EVENT!"

CALL HAAG 03 9654 7389 FOR YOUR MP'S CONTACT DETAILS

Housing for the Aged Action Group, Consumer Action Law Centre, Residents
of Retirement Villages Victoria and Council on the Ageing are calling on all Victorian legislators to join them for morning tea outside the Victorian Parliament House on November 30 to discuss reform issues, or lack thereof, around retirement housing.

Consumer Action, COTA Victoria, RRVV and Housing for the Aged Action Group will also launch their joint Retirement Housing Election Platform as all Victorians, particularly retirees, look toward the 2018 Victorian election.



Morning Tea with Vic Pollies

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Governments Push Financial Doom

Governments Push Financial Doom - Federal & State Governments are actively directing many retirees toward financial doom despite being advised of the negative financial impact on retirees of their statutory & regulatory actions in the retirement village sector.

The poor response of the Victorian Government to their own retirement living enquiry has received criticism including an observation that "Sadly the Victorian government has been seduced by the industry notion that better consumer protections are at the cost of retirement village innovation and growth."


The above was part of a summary statement on Page 28 of the LSIC report from the committee in March 2007 despite hundreds upon hundreds of retirement village residents together with consumer advocate organisations, providing evidence to the contrary in their submissions to the enquiry.

In June 2007 the ABC 4 Corners program 'Bleed Them Dry Until They Die' aired showing statements such as above to be a representation of the failure of legislators and regulators to fully understand what was and still is happening to older Australians in the retirement village sector.

Problems with the retirement village industry can be summarised into some key areas:-

1. Low operational standards of some operators.


2. Outdated legislative frameworks.


3. A failure of regulatory bodies to police and enforce breaches of law.


4. A failure to provide easy access to the law and justice for retirement village residents.


5. The continued use of the retirement village 'Deferred Management Fee' business model designed for charity organisations of decades past.

Federal & State Governments through statutory and regulatory frameworks are encouraging retirees to step into the financial mire of retirement villages. Legislators don't understand or won't acknowledge the negative financial implications for retirees of the deferred management fee model used in this industry sector. A business model designed for charity organisations of decades past not the modern, slick, profit driven, private enterprise organisations of today.

The following example shows the potential financial impact on a home owner should the home owner decide to sell the family home and downsize into a retirement village. The example uses common contractural parameters found within the industry although there can be variations.

The example shows a difference in outcomes over just 7 years of nearly $750,000.00.

The positive social outcomes of living in a retirement village are acknowledged but at what financial cost to retirees. The outcomes are financially debilitating for many retirees and yet an outcome as described above is actively encouraged and even promoted by Federal & State Governments.

It is important to note that the financial damage done in the example above is not done by bad contracts, by bad operators, by poor legislation, by slow acting regulators. The financial damage done is from just one primary thing the deferred management fee business model.

Legislators and regulators can tinker with contracts, fact sheets, dislosure statements, access to the law and while all these areas are important nothing will stop the financial damage done to retirees unless the deferred management fee business model itself is outlawed or heavily reformed.

In this new century is there really room for a consumer product that even lawyers and financial advisors cannot fully explain to their clients.Should not the retirement village industry be based simply on you either buy it or you rent it, they are two concepts everybody understands even legislators and regulators.

Governments Push Financial Doom

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Retiree Pleas Ignored

Retiree Pleas Ignored.

The Victorian Government has responded to the LSIC enquiry into Retirement Living.

The Consumer Action Law Center, Council of the Ageing, Housing for the Aged Action Group and the Residents of Retirement Villages Victoria released a combined statement.

"Response to Retirement Housing Inquiry fails to provide access to justice

After six months of waiting, the Victorian Government has responded to the Inquiry into the Retirement Housing Sector, conducted by the Victorian Legislative Council.

The Victorian Government’s response to the Parliamentary Inquiry has failed to deliver, according to retirement housing residents and advocates. Despite nearly 800 submissions to the Inquiry and recommendations that promised meaningful reform, the pleas of retirees and residents have fallen on deaf ears, with many of the proposed reforms pushed off into the long grass of more reviews.

While the Victorian Government has accepted the Inquiry’s recommendation to launch a review into the Retirement Villages Act 1986 (the Act), it has pointed to various other inquiries and reviews underway, stalling a much-needed comprehensive review of the legislation. A review of the Act has been delayed until an unspecified date.

Of serious concern is the failure to remedy the serious problems identified in providing access to justice for the thousands of older Victorians and their families who are unable to resolve disputes with their retirement housing provider.  The Government can fix this by creating an ombudsman for low cost, timely and binding resolution of disputes.

According the Victorian Government’s response, ‘significant further analysis and evidence are required before a position on this recommendation can be determined’. Given the number of submissions outlining problems with dispute resolution in this sector, along with casework experience of leading community legal centres such as Consumer Action and the significant costs involved in going to court, we are surprised that further evidence is needed by the Victorian Government before it will act.

In relation to improving management training standards, the Victorian Government has left it up to industry to sort out. The response has also failed to deliver any meaningful change to harsh exit fees which can lock people into contractual arrangements. This is wholly unacceptable.

Residents and their families will ultimately pay the price for the Victorian Government’s inaction on retirement housing reform.

Comments attributable to:

Gerard Brody, CEO Consumer Action Law Centre

• If you’re an older Victorian and want to resolve a problem with your retirement living, it should be cheap, quick and accessible. The evidence has shown that we need an ombudsman scheme for this sector.


• Recent piecemeal inquiries by the Victorian Government into the sector have failed to reduce the complexity of contracts or improve outcomes for residents. We had hoped for a strong response from the Government today that showed it cared for residents and their families. Unfortunately, we were left disappointed.

Lawrie Robertson, Vice-President Residents of Retirement Village Victoria

• There is no commitment in the Victorian Government’s response to improving the rights and protections for residents.


• Our members had hoped for quick implementation of a simple, free, binding dispute resolution service and they have been left bitterly disappointed.

Ronda Held, CEO COTA Victoria

• This is a lost opportunity for leadership in responding to the concerns of thousands of older Victorians and their families.


• The Victorian Government had overwhelming evidence of the problems in this sector, and that evidence has been ignored.

Fiona York, Co-Manager, Housing for the Aged Action Group

• None of the main concerns of residents have been adequately dealt with.


• Residents’ concerns about unfair and confusing fees, management practices and dispute resolution have been either dismissed or deferred."

Vic Retirement Villages Safety Issue

Victorian Retirement Villages Safety Issue

Safety and Emergency.

Advocate for Retirement Village legislative reforms Mr. Les Scobie claims there is a safety issue for residents in Retirement Villages in Victoria. He states that there is no legislative requirement in Victoria for a retirement village operator to have a safety, emergency plan. Mr. Scobie made this point in his submission (read submission) to the Victorian Parliament’s Legal and Social Issues Committee enquiry into the Retirement Housing Sector.

Safety and Emergency Procedures or lack thereof – The village operator has made it very clear in correspondence to myself and other residents of the
village that in their view they have zero responsibilty to us in the case of an emergency or evacuation  New South Wales has provided greater clarity as to
the retirement village operator responsibilities in an emergency or village evacuation.""

The graphic below shows the NSW Act which places a legislative requirement upon a retirement village operator in the interest of the safety of residents.

Consumer Affairs Victoria asleep at the wheel?

A retirement village resident Mr. Les Sobie in Wangaratta Victoria claims Consumer Affairs Victoria have been asleep at the wheel when it comes to a matter raised by him with the authority. Mr. Scobie claims that inaction by Consumer Affairs Victoria will cost residents in the village where he resides in the order of $1.5 to $2.0 million dollars at today's values, the village operator however will benefit from increased revenues to the tune of this $1.5m to $2.0m dollars despite breaching the provisions of the Act.

At July 1 2014 the Victorian Government introduced new provisions making it compulsory for retirement village operators to issue a fact sheet to prospective residents which outlined certain provisions of the occupancy contract they would be offered for execution. One such point of clarification was who was responsible to pay for the refurbishment cost of the unit upon departure of the resident. The legislators felt strongly about this new provision and provided for a financial penalty in the order of $30,000.00 for each occasion that the village operator failed to issue such a fact sheet. Legislators also provided consumer protection provisions in the Act should a fact sheet with a material difference to the contract be issued.

Mr. Scobie states "For approximately 18 months after the introduction of these new legislative requirements the operator failed to issue a fact sheet to prospective residents as required by the Act. For the subsequent 18 month period the village operator issued a fact sheet with a material difference. The fact sheet advised prospective residents that they would not be responsible for the refurbishment cost of the unit they occupied upon their departure from the village whereas the occupancy contract they were subsequently given for execution states that the resident is responsible for this cost."

Refurbishment of units, the cost and who pays for it was highlighted at the Parliament of Victoria Legislative Council Legal and Social Issues Committee inquiry into the retirement housing sector . On page 55 of the report (see report) the committee was advised that refurbishment costs are in the order of $60,000.00 per unit at present day values.



In August 2016 Mr. Scobie wrote to Consumer Affairs Victoria advising them of the matter as outlined and as they had been charged by the Victorian Government with the responsibility and authority of administering the provisions of the Retirement Villages Act 1986 to step in and protect these consumers. Mr. Scobie states that he was subsequently advised in mid 2017 by the regional manager of Consumer Affairs Victoria that the matter had been looked at by Consumer Affairs but no action would be taken to redress the situation retrospectively on behalf of those residents impacted at a cost of $60,000.00 per resident.  In the Legislative Council Legal and Social Issues Committee inquiry into the retirement housing sector recommendation 2 was for the government to review the provisions of the Retirement village Act 1986, Mr. Scobie questioned "what is the the point of changing the law if the policeman can't or won't enforce that law, that is not consumer protection."

Recommendation 15 of the Legislative Council Legal and Social Issues Committee report was that the government consider the appointment of an ombudsman to oversee the retirement living industry in Victoria. Consumer Affairs Victoria was criticised amongst submissions (see submissions) to the enquiry, Mr. Scobie states he is of the firm belief that "examples such as above together with the industry revelations contained in the ABC 4 Corners program bleed them dry until they die are a clear indication that a new body with powers to act and a commitment to act is needed in Victoria.''

Retirement Village Legislative Reforms Essential

Long time activist for reforms to the Victorian Retirement Village Act 1986 Mr. Charles Adams says the No.1 reform required is a legislative change to the current requirement that to enter a retirement village you must pay an in-going contribution and that contribution cannot be classified as rent.

In a recent letter to the Premier Mr. Adams wrote:-


"Dear Premier,

For the last 31 years the Retirement Village Act 1986 has been
disadvantaging "Retirement Village" lessees. Don't you think that is
long enough?

This is because the RV and donation definitions, supplied back in 1986
by the developers, in their own interests, by making the contract model
raise and defer, and thereby obscure, the cost until after termination.
This may be legal, but is certainly not the stated purpose of the
Victorian Act. The LSIC 150 page report on this subject omitted the
three, in 760 submissions, that illustrated this point.

US village contracts are residential tenancy, with secure tenure, as the
critical element necessary to provide security for retiree lessees.

Changing those two definitions to rationally allow transparent costing
and should make for a major increase in retiree lessees into retirement
villages for the benefit of the whole community. It would reduce the
demand for more infrastructure. The developers will howl, but the
community will benefit.

Instead of 5% of the demographic going into retirement villages,
Victoria could expect 15%, as in the US."

The matter has been referred to Consumer Affairs Victoria, a body heavily criticised by retirement village residents in their submissions to the State Government enquiry into retirement living. https://www.parliament.vic.gov.au/lsic/article/2970

Retirement Housing Enquiry a damp squib

Levitt Robinson Solicitors claim:-

"The report of the Victorian Enquiry into the Retirement Housing Sector has proven to be a damp squib and disappointed many genuinely aggrieved Victorian residents of retirement villages."

They go on to say:-

"The enthusiasm with which it was greeted by the Property Council of Australia’s Victorian Division, when it was released on 7 March 2017, is a strong indication that it was a fillip to developers and brush-off to resident retirees.

The Property Council proposed that there should be a special industry Advocate to represent residents’ interests and did not endorse the Committee’s recommendation for the appointment of an Ombudsman for the sector.

The Financial Ombudsman Service nationally has done little to help bank customers other than to forestall legal proceedings, while complaints to the Financial Ombudsman Service are considered. However, FOS bends over backwards to see things the banks’ way and even where it finds wrongdoing by a bank, generally proposes minimalist redress, from the borrower’s perspective. Rarely is there a satisfactory remedy achieved for a borrower which does justice between the parties through the FOS complaints process.

I am no big fan of Ombudsmen. I rather prefer considered and strategic law reform which provides effective consumer protection.

The Chair of the Retirement Housing Enquiry Committee, Margaret Fitzherbert MLC, introduced the Report by stating that “The Committee was not tasked with solving every problem identified by those who contributed to the enquiry.” She expresses satisfaction that “Most residents are happy in their retirement community”. Recognising that many residents did not (and may still do not) understand their management contracts and did not receive proper legal advice, she recommends that the Law Institute of Victoria support better training for the legal profession.

At page 10, under “Key Concerns”, the Committee noted that developers are encouraged to look for strategies to redevelop facilities to a more expensive form of retirement housing because they are not content to see the owners of Independent Living Units (“I.L.U.s”) obtain the benefit of capital gains themselves. (Section 1.3.3 at p.10).

The Committee appears to see nothing wrong with retirement village developers undermining the property rights of I.L.U. owners and fails to call out industry malpractice for what it is.

At Section 5.1 on page 45, the Committee appears to have found that residents ought to have known that buying into a Retirement Village is a “terrible investment but if you want a lifestyle, it is a reasonable investment based on the contract”.

The Consumer Action Law Centre believes that many retirees enter into villages falsely believing they are buying a property rather than a licence to reside in a property.

With respect, that is largely because of the way in which such properties are marketed and the duplicity of Retirement Village operators in the way they describe interests, inconsistently with the substantive interest being conveyed.

All in all, the Committee seems to have accepted the industry’s self-promotion over the complaints of hundreds of residents who had made submissions and, in a rather superficial and generalised manner, the Report appears to accept that operators are providing what the residents are paying for.

You may see a lot of retirement villages painted white in Victoria in years to come, since the Victorian Parliament has given the Victorian Retirement Housing Sector a pretty thorough-going whitewash.

At Levitt Robinson, we are ready to challenge what we see in many instances constitutes de facto elder abuse and unconscionable conduct by the industry, committed against retirees in the sector."

The full story here:- Levitt Robinson Solicitors

Calls for federal inquiry into retirement villages

The Sydney Morning Herald reports:-

Labor, the Greens and former Australian Competition and Consumer Commission chairman Allan Fels have called on the government to urgently review the retirement village sector following allegations elderly Australians are being ripped off.

In a series of stories, Fairfax Media and ABC's Four Corners uncovered questionable practices by one of the biggest listed operators, Aveo, while it was raking in huge profits.

Opposition Leader Bill Shorten blasted the exploitation of vulnerable people in aged care and flagged a willingness for bipartisan reform following the revelations.

Mr Shorten said on Tuesday he was willing to work with Prime Minister Malcolm Turnbull on solving the sector's problems and warned that "large companies who treat vulnerable older Australians in the manner in which we saw last night are not part of the solution".

"A nation that treats its old people in the manner in which we saw on television last night should be ashamed of itself," Mr Shorten said.

Go to the SMH web site for full details.

LSIC Recommendation 13

The Victorian Parliament’s Legal and Social Issues Committee inquiry into Retirement Living has made 15 recommendations.

RECOMMENDATION 13: That the retirement housing sector engage more proactively with disability and aged care design professionals when designing villages to facilitate greater choice and an ability for people to age in place.

The State Government is yet to respond to the recommendations.

Issues and concepts around Retirement Villages are presented at http://www.retvill.net/

LSIC Recommendation 12

The Victorian Parliament’s Legal and Social Issues Committee enquiry into Retirement Living has made 15 recommendations.

RECOMMENDATION 12: That the Victorian Government ensure that an appropriate minimum Certificate level applies to retirement village management courses.

The State Government is yet to respond to the recommendations.

Issues and concepts around Retirement Villages are presented at http://www.retvill.net/

LSIC Recommendation 11

The Victorian Parliament’s Legal and Social Issues Committee enquiry into Retirement Living has made 15 recommendations.

RECOMMENDATION 11: That the Victorian Government give consideration to developing a model for mandatory accreditation for all retirement housing providers.

The State Government is yet to respond to the recommendations.

Issues and concepts around Retirement Villages are presented at http://www.retvill.net/

LSIC Recommendation 9

The Victorian Parliament’s Legal and Social Issues Committee inquiry into Retirement Living has made 15 recommendations.

RECOMMENDATION 9: That the Victorian Government require that retirement village operators provide every resident with an estimate of their exit fees every financial year.

The State Government is yet to respond to the recommendations.

Issues and concepts around Retirement Villages are presented at http://www.retvill.net/

LSIC Recommendation 8

The Victorian Parliament’s Legal and Social Issues Committee inquiry into Retirement Living has made 15 recommendations.

RECOMMENDATION 8: That the Victorian Government require that deferred management fees are applied on a pro rata basis.

The State Government is yet to respond to the recommendations.

Issues and concepts around Retirement Villages are presented at http://www.retvill.net/

LSIC Recommendation 7

The Victorian Parliament’s Legal and Social Issues Committee enquiry into Retirement Living has made 15 recommendations.

RECOMMENDATION 7: That the Victorian Government require that retirement village operators disclose in-going prices with and without deferred management fees.

The State Government is yet to respond to the recommendations.

Issues and concepts around Retirement Villages are presented at http://www.retvill.net/

LSIC Recommendation 5

The Victorian Parliament’s Legal and Social Issues Committee enquiry into Retirement Living has made 15 recommendations.

RECOMMENDATION 5: That the Victorian Government investigate measures to ensure that all retirement village units hold the same owners corporation voting rights.

The State Government is yet to respond to the recommendations.

Issues and concepts around Retirement Villages are presented at http://www.retvill.net/

LSIC Recommendation 4

LSIC Recommendation 4 - The Victorian Parliament’s Legal and Social Issues Committee inquiry into Retirement Living has made 15 recommendations.

RECOMMENDATION 4: That the Law Institute of Victoria's Elder Law Committee develop professional accreditation for specialists in retirement housing and also provide training to general practitioners to improve their understanding of this area of law.

The State Government is yet to respond to the recommendations.

Issues and concepts around Retirement Villages are presented at http://www.retvill.net/

LSIC Recommendation 3

The Victorian Parliament’s Legal and Social Issues Committee enquiry into Retirement Living has made 15 recommendations.

RECOMMENDATION 3: That Consumer Affairs Victoria collate its online 'Retirement villages' information into a booklet. Retirement village operators must provide this booklet to potential residents either as a hard copy or electronically.

The State Government is yet to respond to the recommendations.

Issues and concepts around Retirement Villages are presented at http://www.retvill.net/

Retirement Residents Call for Reforms

Reforms called for by Retirement Living Residents

"On the 1st May, a group of 140 residents of retirement villages, residential villages, caravan parks and
independent living units came together at a Retirement Housing Forum at Victoria University to ensure the
recommendations from the recently released Parliamentary Inquiry are acted upon urgently to address
serious concerns.

The forum was supported by Housing for the Aged Action Group, Consumer Action Law Centre, Residents
of Retirement Villages Victoria and Council on the Ageing as part of an ongoing collaboration on issues
facing residents of retirement housing.

Fiona York, co-manager from Housing for the Aged Action Group, said “The forum was a great opportunity
for people to work together on a strategy to ensure that the Inquiry recommendations are adopted by
Parliament”. Parliament has six months to respond to the Inquiry recommendations, which were released
last month.

The group were addressed by experts in the field, Katherine Temple from Consumer Action Law Centre,
Rhonda Held from Council on the Ageing, Lawrie Robertson from Residents of Retirement Villages Victoria
and Fiona York from Housing for the Aged Action Group.

 

After much discussion, the residents group identified the top five areas for urgent action. These are:
• An alternative dispute resolution process, such as a Retirement Housing Ombudsman
• Appropriate training for managers of retirement housing
• A process of accreditation for that all retirement housing providers
• A review of the Retirement Villages Act 1986
• Clarification of deferred management fees and clearer contracts

Fiona York (HAAG) noted, “We know from our years of action that we are more powerful when we work
together, and it was great to see so many people attend to express their concerns, prioritise them and plan
for the best way to influence change to improve the lives of residents of retirement housing”.
The group hopes that the Government will act swiftly to make the reforms necessary to make living in
retirement housing a safe and secure option for all older Victorians.

For more information contact HAAG, 9654 7389"

Criticism of Recommendation 10 in LSIC Enquiry

The Victorian Parliament’s Legal and Social Issues Committee Recommendation 10: That the Victorian Government make provisions to allow retirement village operators to pay either the refundable accommodation deposit (RAD) or daily accommodation payment (DAP) for residents entering aged care until the resident’s unit is sold received some criticism at the Retirement Housing Forum held in Melbourne on Monday May 1st. As part of their entry payment to a retirement village residents provide to the operator an amount of money on an interest free loan basis thus reducing if not eliminating the capital borrowing requirements of a village owner/operator. Retirement village residents have expressed the view that as operators are merely paying back money belonging to the resident, any prudent and competent owner/operator should be capable of making sufficient capital provisions to meet this occurrence. The adoption by the Victorian Government of this recommendation would in the words of some retirement village residents simply allow less efficient and less prudent operators to exist in the marketplace at the ultimate cost of consumers.

The Victorian State Government is yet to respond to the LSIC recommendations.

Issues and concepts around Retirement Villages are presented at http://www.retvill.net/