Committee recommends changes to retirement housing sector

As you might have read, retirement villages have been under the spotlight in Victoria during the past 12 months.

A Victorian parliamentary committee has been looking at the retirement housing industry, hearing from hundreds of residents, industry bodies and advocacy groups.

On Tuesday, the Legal and Social Issues Committee reported back and came up with 15 recommendations for changes to the retirement housing sector at both government and industry level.

Among the recommendations include more transparency around retirement village contracts, a low-cost dispute resolution process and accreditation and training for retirement village operators and managers.

Of particular interest to you as a current or prospective retirement village resident are the recommendations surrounding contracts and costs.

The Committee recommended that retirement village operators:

a) disclose ingoing prices with and without deferred management fees;

b) apply deferred management fees on a pro rata basis; and

c) provide every resident with an estimate of their exit fees every financial year.

Committee chair Margaret Fitzherbert MLC said that residents had “heightened expectations” about the services they’re delivered in retirement housing.

She highlighted a number of issues that stood out during the Inquiry.

“Contracts are complicated and are not always well understood by all parties,” she said.

“Reliable legal access may be hard to access. There are significant cost of living pressures for those on fixed incomes.

“Relationships between residents and management are sometimes fractious and existing options to resolve disputes are poorly regarded by many residents.”

While she believed most residents were happy in their retirement communities, Ms Fitzherbert said it was clear that dispute resolution processes needed to be improved and training for village managers be expanded.

“Victorians deserve to feel confident that should they choose to move into a retirement village or park, they will find a suitable home where they will feel safe and enjoy their retirement years, and where this does not occur, there are processes in place to address these concerns,” she said.

“The recommendations we have made are aimed at improvements to provide that confidence.”

The recommendations have been met with mixed reactions from residents, the retirement living sector and advocacy groups.

Seniors advocacy group, Council on the Ageing, has welcomed the recommendations – particularly the changes that would improve transparency around retirement village contracts and dispute resolutions.

COTA Victoria CEO Ronda Held said the tireless work of retirement village residents campaigning for change had “finally been heard”.

“Older people are often intimidated and reluctant to take up disputes through VCAT. The Committee recognised the need to provide low cost, timely and binding resolutions,” she said.

“We are pleased to see recommendations that address complexity of contracts, greater disclosure of costs including deferred management fees and exit fees. Reforms to clarify timelines and responsibilities for repairs and maintenance are overdue.”

Executive Director Sally Capp said that while the Property Council supported some of the recommendations, there were others that would add “red tape” that will “increase the cost of living for seniors”.

“While we support the Committee’s objectives, many of the recommendations will add to residents’ costs without delivering a commensurate benefit,” she said.

“We also support the Inquiry’s recommendation to ease the financial burden of residents moving to aged care; it strikes a fair balance between the interests of operators and residents.

“We believe village residents need an advocate to represent their interests; an ombudsman process can be both costly and intimidating which can determine the number of residents accessing the service. There are also many resident benefits and protections that are not widely understood or being utilised.”

Ms Capp noted the Property Council also didn’t support zoning that “gives any sector a leg up over another”, stating that was “for the market to decide”.