Leading seniors’ advocacy group, COTA Australia, is calling on the federal government to consider implementing a national regulatory system for retirement providers, in the wake of the Fairfax/Four Corners program on issues in the retirement village industry.
The retirement village operator Aveo was the focus of Four Corners last night after current and former residents shared their personal stories of complex contracts and confusing marketing.
Chief Executive of COTA Australia said that while most retirement village residents lead fulfilling lives, older Australians welfare too often slips through the cracks in the Commonwealth/State regulatory system, with inconsistent and inadequate laws confusing residents and families.
“While an overwhelming majority of retirement village (RV) residents are happy with their living arrangements, the Four Corners investigation highlights much more work needs to be done to reduce the complexity of contracts and fee structures, and explain them properly.
“RV contracts remain difficult to navigate, despite various attempts by state governments to legislate plain English summary disclosure.
“Contracts should be simplified and standardised which will allow for comparability and equip older Australians with more power and information to make a well-informed choice when selecting a provider.
“Far too many people become RV residents without fully understanding that it is not usually a real estate purchase and you don’t have the same controls you would have if you owned your own home.
“The most popular business model for RV operators in Australia is that of the Loan-License/Deferred Maintenance Fee, which is not intuitively understood by most people and too often poorly explained by operators. It is not even properly understood by many lawyers, accountants and financial advisers.
“We should not wait till the dust settles after last night’s report. Now is the time to reconsider a Commonwealth role, or at least standardisation of legislation across States through COAG.
Various inquiries over the years have looked at a Commonwealth role in RV regulation, starting with the 2007 inquiry and subsequent report ‘Older People and the Law’, which put forward a number of recommendations that were never implemented.
“RV contracts are not really about Real Estate…rather, they are a financial product whereby people have a licence to live in an RV unit, and there a myriad of financial and personal risks attached to this model.
“They should be subject to regulation by the Australian Securities and Investment Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC), not under-resourced and inappropriate State tenancy tribunals,” Mr Yates said.
“When it boils down to it, older Australians deserve the utmost clarity and consumer protection when they are choosing where and how they should live in the latter stages of their life.”
