Pensioners mount retirement industry fight 7



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Is it time for a review of the retirement industry? 14 residents of Willow Lodge Over 50s Resort in Melbourne think so and have mounted a challenge to the retirement operator designed to challenge the sector’s popular model, the deferred management fee.

They are opposing their village’s contract terms that require them to pay 4 per cent of the property’s sale price for each year of management as a “deferred management fee”, which for many of these residents is alleged to be up to 20 per cent of the property values.

Each of the people in the complaint are retired pensioners, according to a Sydney Morning Herald report and they are alleging that the contracts failed to offer opportunity for negotiation and did not take into account their circumstances.

The Retirement Living Council commented that the deferred management fee is the most common method of payment for retirees living in a village. But this company is not calling itself a “village”. They are calling themselves an “Over 50s Resort”.  There is a lot of confusion about the differences in fees structures of retirement living and retirement resort operators and incidences like this do nothing to support the honest operators out there providing great places for over 50s to live.

Retirement villages and retirement resorts are actually quite different but the fee structure generally includes the house price and a weekly site fee to cover the cost of the facilities. In some cases there are other costs as reported in today’s Sydney Morning Herald. The upshot is buyers need to know exactly what they will be paying and what they will receive in return.

Starts at 60 contacted Living Gems Over 50s’ Lifestyle Resort as they advertise an industry best fee guarantee.

Living Gems’ general manager Adrian Puljich says their industry best guarantee is very clear. “We offer a house at a contracted price. Residents pay an ongoing weekly site fee but they don’t pay anything else. Living Gems homebuyers do not pay entry fees, exit fees, deferred body corporate fees, council rates, stamp duty or legal fees. They don’t pay anything else except water, electricity and internet connection.

“Home-owners may sell at any time and retain all of their capital gain. Home owners do not own the land the home is built on but their right to live on it for an indefinite period is guaranteed by law,” Adrian says.

From where we sit it seems time to remove the confusion around fee structures and make disclosure an important priority for operators so that good operators in the industry aren’t tarnished and community members are not infuriated.  

Do you agree? Have you ever been perplexed by the complexity of the retirement industry’s deferred management fee?

Rebecca Wilson

Rebecca Wilson is the founder and publisher of Starts at Sixty. The daughter of two baby boomers, she has built the online community for over 60s by listening carefully to the issues and seeking out answers, insights and information for over 60s throughout Australia. Rebecca is an experienced marketer, a trained journalist and has a degree in politics. A mother of 3, she passionately facilitates and leads our over 60s community, bringing the community opinions, needs and interests to the fore and making Starts at Sixty a fun place to be.

  1. One fault I have heard of in these retirement villages, is that a single person pays the same amount as a couple, which doesn’t seem fair.

  2. The Living Gems proposition sounds okay but I would want to know more about the whole thing before making any decisions.

  3. We live in an over 50’s resort and have no exit fees. Pays to do your research though, we almost moved into another one which had a deferred management fee, makes a huge difference!

  4. My husband fought for many years with the owner operators, on the complexity of the Deferred Management fee which they were charging on exit, he fought for the families of the residents that had passed or had gone to Nursing homes, he even had extensive articles in The Age and Resident of Retirement Villages Vic Newsletters. Sadly he passed away and his work was never finished, now residents are asking me for the information as it is stored on his computer.

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