5th Mar 2018

More retirement village residents to join Aveo class action

FONT SIZE: A+ A-
Aveo court case widens scope
Olga Galacho

A class action against Aveo has been widened to include retirement village residents who felt aggrieved by what law firm Levitt Robinson described as “dreadful management agreements and service contracts”.

A directions hearing has been granted by the Federal Court’s Justice Bernard Murphy for Levitt Robinson to this month launch a case on behalf of hundreds of residents. The action names Robert Michael Luke, who is a co-executor of his deceased father’s estate, as the chief plaintiff.

Before Mr Luke’s parents died, they lived at Peregian Springs Retirement Country Club in Queensland, a facility managed by Aveo. 

The legal action was pre-empted by media coverage last July of Aveo residents who alleged the village operator had treated them unfairly.



Among the accusations levelled at Aveo were its practice of “churning, gouging, ignoring safety issues and misleading marketing”, according to Fairfax Media.

The complainants say Aveo’s contracts are overly dense, the exit fees are crippling and when residents or their estates sell their village apartments back to the operator, they are forced to accept knock-down prices.

At the core of the original class action is the village operator's strategy of changing freehold titles to leasehold, named the Aveo Way.

The court will hear that as a result of the Aveo Way, residents have seen their properties fall in value as their titles are converted to leases that do not command as much when sold.

The firm is conducting the case on a no-win, no-fee basis. If the action succeeds, residents who joined it will forfeit up to 35 per cent of the increased value of their properties. Higher valuations are expected to result from the units being sold with freehold titles as opposed to leaseholds.

A separate class action against Aveo is being considered by law firm Maurice Blackburn. It would mostly focus on unfair contract terms, such as the level of exit and maintenance fees, and is only open to residents who sold out of an Aveo property after 2013.

Maurice Blackburn told YourLifeChoices on Friday that its “investigation into this potential action is progressing well”.

“Our investigation is examining whether Aveo contracts contravene Australian consumer law. We are investigating whether these contracts include terms that could be deemed unfair,” the law firm said.

“We intend to review all fees charged to residents upon exiting their unit. Aveo has been accused of charging exorbitant exit fees (often referred to by Aveo as deferred management fees).

“Typically the exit fee charged by Aveo is between 20 to 40 per cent.”

The firm is also exploring whether other terms might be regarded as unfair, such as:

  • capital gain/loss terms which entitle Aveo to 50 per cent of any capital gain but the resident bears 100 per cent responsibility for any capital loss
  • terms which require the resident to bear the cost of refurbishing the unit
  • expensive maintenance fees that continue after the unit has been vacated, and
  • making the resident responsible for the costs of finding a new resident.

 

Maurice Blackburn said it had received “a significant volume of interest from former residents of Aveo”.

In a statement to YourLifeChoices, Aveo said it would “staunchly defend the class action filed in the Federal Court of Australia by Levitt Robinson”.

“We remain confident that we can demonstrate that we have met our statutory and other obligations and our steadfast commitment to our residents’ welfare and wellbeing,” Aveo Chief Executive Geoff Grady said.

Do you know anyone who has joined the class action against Aveo? Would you ever move into a retirement village? Do you have any favourable experiences of living in a village?

Related articles:
Aveo makes admission
Minister responds to scandal
More village scrutiny required





COMMENTS

To make a comment, please register or login
tisme
5th Mar 2018
10:46am
neglect in nursing homes has been going on since I worked in the industry. in 1980 no one cares
Blossom
5th Mar 2018
11:43am
People have complained about the services, conditions of property they are forced to live in, staff mistreatement and neglect.
They now have to pass accreditation assessments. Problem is they normally know when the assessments are going to be done. I complained when my Mum was left sitting on a commode for at least 30 minutes after she finished using it. They are not comfortable to sit on and she was unable to get back into bed. I only tried once and I almost let her fall onto the floor as she is reasonably heavy and I have weak muscles. They also knew she had a hiatus hernia and some of the food was too spicy for her.
Triss
5th Mar 2018
12:09pm
Reading the reports of neglect in BUPA homes makes your hair stand on end.
The thing that I don’t understand is if you abused or neglected someone in your own home like that the police would be involved. Why are they not involved in care home abuses?
KSS
5th Mar 2018
1:18pm
Nursing homes and aged care facilities are NOT the same as retirement villages which for the most part are aimed at the independent living healthy over 50s market.
Jennie
5th Mar 2018
10:51am
Living in a retirement apartment is hell. Community living means you can't escape from narcissists and spiteful cliques even though numerically they are in the minority. Management is lazy and uncaring about defects, but the minority of residents with the biggest voices are worse.
TREBOR
5th Mar 2018
11:14am
No, thanks - I'll wait until my carer role is gone and I'm on my own, then I'll be living on a large boat and part-yearing in a European destination to avoid the hot months here.

Arrgh, Skipper - e' were found tied t' wheel after t' great storm.... valiant t' the last, e' were!
TREBOR
5th Mar 2018
11:13am
In all fairness I'll wait for the findings and the evidence. However - while ever the retirement homing industry remains on a for profit basis, it will never be efficient in terms of providing value for money or in providing reliable tenure etc in their own property for those who pay their way there.

Another case where private industry is clearly NOT performing up to scratch even, and is definitely not providing better service and value for money. In this case it is even more disgusting because it is milking those who are vulnerable at a time when they should be enjoying what life they have left, and is stomping on any dissenters like the Chinese Army in Tianenmen Square, but that's the way things are done there.

Aveo has the apparent worst record while generating huge profits for its owners, who see it as nothing but a get-rich quick scheme requiring homes in Point Piper for daughters etc.

Amazing.... if they can afford that they can afford better treatment and facilities first.
johnp
5th Mar 2018
11:16am
Just confirms my belief that its best to steer completely clear of AVEO. The question of course is - which of the others are also to be avoided and how to determine that. Something like a choice style report is needed into retirement villages generally.
Pammy
5th Mar 2018
12:03pm
Of course, it's not only Aveo. Many of those sections of the agreements sound very similar to those we had to submit to for my father's independent living unit when he had to move into the same company's nursing centre. No hurry for them to sell his unit as we had to pay ongoing costs for 9 months, as well as very high fees in the nursing home. Amazingly, it sold just as the time was up! Not to mention the ridiculous $28,000 we were forced to shell out for refurbishing a tiny 1-bedroom unit. They get you coming and going.
Knows-a-lot
5th Mar 2018
2:47pm
In a word ... BASTARDS.
Ella
5th Mar 2018
12:06pm
Most of what i read in this article is quite true having had 1st hand experience of how Aveo works when my brother and i had to move my mother from her Aveo retirement unit into a nursing home. Firstly they wait up to nine months before they put the unit on the market while still charging the usual monthly service fees. This is in the fine print. Then they took a whopping 30% roughly off the sale price themselves plus around $30,000 for what they called refreshing it for sale . They have total control over the selling process. They hung onto her money afterwards while ignoring emails and phone messages until my brother threatened action. Their contracts are fairly complex for the elderly and i pity people who dont have family looking out for their interests. I would crawl around my own home before going into a retirement village.
trood
5th Mar 2018
5:03pm
It is the unethical procedures in retirement villages that is galling.
Its great if you live and die in one but if you have to move out to go to a nursing home or elsewhere you need as much money as possible. Villages have only themselves to blame for bad publicity because of their immoral and unethical practices. DOUBLE DIPPING is a problem, buying price $400,000, selling price say $450,000 , profit of $50,000 is shared 50/50 but then they want to take their percentage of 24% off the selling price of $450,000 which no longer exists as $50,000 has already been taken out. On moving out for 1-1/2 months have to pay full monthly maintenance of $550 after this time its split 50/50 UNTIL THE UNIT IS SOLD. Charge 3% + GST eg $15,000 commission for resale departing resident has to pay 50%, they have an in-house sales office so the village gets the whole lot. On top of that $1250 in legal fees; $140 registration fees for what? sign off a contract! that's gouging too.
Roscoe77
5th Mar 2018
12:17pm
Tisme and Blossom, both of your comments reflect upon nursing homes, which are regulated by the Federal Government and require a needs basis for entry, and may be FORCED to move to a higher level of care due to ill health. The Retirement Villages operate under each States' legislation and are available to those who CHOOSE to move in there for a particular lifestyle.

Jennie, I am sorry that your experience of being a resident in a village has been so poor. You obviously chose a village that does not uphold strong standards. Many aspects of society are ruled by the same tenets you claim here. Ever heard the maxim "the squeaky wheel gets the oil"? It is an unfortunate aspect of human society that minorities out-voice the silent majority

Trebor, you started off so eloquently, then it deteriorated with your simile of the massacre in Tiananmen Square and operators being of the same ilk. Yes, there may well be some unscrupulous operators in the industry. Don't forget, the for-profit operators still only make up about half the industry, so you are deriding churches and charitable organisations with your fallacious sweeping statements.

JohnP, I couldn't agree more than there should be proper investigation and inquiry into the sector, even if it does result in further regulation for the industry. If there are operators who aren't up to scratch, then they should be forced out. Just be careful good operators aren't unfairly targeted or hit too heavily for doing the right thing
johnp
5th Mar 2018
12:20pm
Any comments as to how does one determine which are the "good operators" ??
TREBOR
5th Mar 2018
12:39pm
Well, the reports of the way people were treated when they complained or dissented about their treatment indicate the same type of mentality in play as Tianenmen Square.

The price of liberty is eternal vigilance, and every time a little progress is made towards greater and greater control and dominance by one group, you will see that extended over and over until they have total control

It's part of human nature - and in one of my books I wrote that a company management' would be happy and more able to run the show properly if it were not for those pesky contractors/workers and the clients'.....

A universal code and clear outlining of contracts would help a lot, but while ever Communist Party of China affiliates are enabled to run the show here, they will suffer the One Party State mentality - they, the Mandarins, are in control, and the rest will do as told.

Look to our own politicians for the same kind of mentality, and it is not bounded by party lines, either. ALL operate on the undeniable principle that if only they had total control everything would be rosy in Denmark.
TREBOR
5th Mar 2018
12:41pm
I didn't mention churches and charitable organisations - in the past I've pointed to just one such run by the ex's cousin, which is ethical and fair.

Every reference I've made today is based on my first comment - about for profit organisations.
Puglet
5th Mar 2018
2:38pm
Johnp Choice magazine has published some really good articles on selecting a ‘good’ retirement village (available free on the on the internet). They can’t tell you which ones are ethical but they do tell you what all the terms mean and what to look for and about the sorts of scams Aveo and many others use.
johnp
5th Mar 2018
2:54pm
Thanks Puglet that helps. However would be good if they could "tell you which ones are ethical". Or is that too difficult or against some sort of legal constraint ?
Knight Templar
5th Mar 2018
1:05pm
The article quotes Aveo Chief Executive as saying "We remain confident that we can demonstrate that we have met our statutory and other obligations ..." I have no doubt that legally, he is correct.

What appears to be ignored however, are the ethical and moral dimensions. These need to be spelled out in a uniform and enforceable code of conduct that identifies and removes unfair financial treatment. Codes of Conduct should be signed off and enforced by Commonwealth authorities.
Rae
5th Mar 2018
3:15pm
This company is well known now so people signing up for it have themselves to blame. I wouldn't want to be trying to sell a unit in one of their villages now.
TREBOR
5th Mar 2018
10:14pm
Sounds like the old worn-out political justification that 'it's within the rules'...

Shows the need for changes to the rules.
Knows-a-lot
5th Mar 2018
2:39pm
It sounds to me like the whole nursing-home industry sector needs a severe and penetrating Royal Commission into it, with hefty penalties and binding results. The fact that it's 'for profit' is the problem: it's all about GREED.
Raphael
5th Mar 2018
3:39pm
The most effective and efficient means to provide nursing home care is with the free market

Leave it to government and they will create the same mess they did with healthcare and education.
Big Al
5th Mar 2018
3:49pm
There you go again, K-A-L. An ill informed, sweeping generalization. Your mantra - Private sector equals Greed! Maybe you would have been happier behind that wall that was erected in Berlin in 1961. They had no private sector, and I know for a fact that the vast majority of people weren't happy. Just to spell it out for you, knows very little, if you pay $100 for something and sell it for $90, you go out of business very quickly. However if you sell the same item/service for $110, that doesn't equal greed (except in your myopic world). If you are so unhappy in this country K-A-L, be my guest and move to China - but can you do so quickly so that rest of us don't have to put up with your ridiculous rants!
TREBOR
5th Mar 2018
10:15pm
The 'free market' has never once produced anything of value for money for those ending up using it and paying for it .... that's why we even bother to have governments...
Raphael
5th Mar 2018
3:36pm
Ambulance Chasing lawyers out to fleece the elderly and a private company

Shameful
Puglet
5th Mar 2018
4:19pm
The lawyers stand to earn a lot of money if the class actions are successful. However I can’t think of another way for AVEO litigants to get hundreds of thousands of their dollars back, can you? Some residents need to move either to high level care or because they no longer meet the ownership criteria and AVEO want them out. They can’t afford to stay and they can’t afford to leave. The government will never interfere with a billionaire who donates large sums of money to the LNP. The residents are collateral damage.
Raphael
5th Mar 2018
4:31pm
They will get nothing
I dont see what AVEO has done wrong
Knight Templar
5th Mar 2018
5:53pm
Raphael. You are probably correct in the sense that AVEO has done nothing that is arguably ILLEGAL. Its behaviour may be considered unconscionable but nevertheless, within the law.

We can only trust that the adverse publicity will lead to fairer financial outcomes for village residents in the future.
TREBOR
5th Mar 2018
10:16pm
Again - shows the need to change the rules.....
Big Kev
5th Mar 2018
3:47pm
There was a massive inquiry run into nursing homes just a couple of years ago. Trouble is that the Productivity Commission ran it. They are all economists who worry about the almighty dollar. The Productivity Commission needs to be half made up of Social Workers so that they consider the effect om people and society.
The trouble is that under the Liberals even the monitoring of the homes was privatised. Prior to that seven homes in Qld were shut down when public servants ran the show. Since then .....none.
The other issue is the need for a set ratio of staff to resident. Many still have little more than one sleepover sraff member.
Big Al
5th Mar 2018
4:28pm
Big Kev, I was an administrator in the aged care sector in my working career, and whilst your point about adequate staff to resident ratios is valid, I would qualify it by adding that you need the 'right' people as part of that ratio. Unfortunately that industry relies on lowly paid (and as a consequence, lowly skilled) staff. Many are caring, but don't necessarily work 'smart'. The conundrum is that if you raise wages, you increase costs, to the resident and/or his or her family. As a society, we need to work out how much we are prepared to pay.
Jannie
5th Mar 2018
4:25pm
I have heard that there are a lot of nursing homes owned by overseas interests does anyone know if this is true? I worked in an aged care facility and came across a lot of staff who could not speak English properly making it hard for the residents to communicate and get the proper help. I agree with Ella I will stay in my own home for as long as I can even if I have to crawl around the house. Tisme is also correct NO ONE CARES................
Raphael
5th Mar 2018
4:30pm
Good opportunity for the elderly to learn a new language.
Keeps their minds active as well
Jannie
5th Mar 2018
4:35pm
Which language would you suggest Raphael? There is such a large number of immigrants in the facilities it would be impossible to learn any one language. But the way it is going perhaps we all should be learning to speak Arabic.
leek
5th Mar 2018
10:22pm
Golly Gosh- I am in a GREAt retirement villgae. We all OWN our land and titles. Our maintenance fees are only $324 a month but we do pay our own water and council rates because we own the land. we have a mssaive garden area in the centre of the village that used to be a quarry so cannot be built on for 100 years(31 years now passed). The village is privately owned by the family that built it over 30 years ago. Have 2 office workers/manager and 2 maintenance me and other various part time people. We have a residents committe that orgnises the bulf of the functions. But management do the big Christmas/mothers/fathers day functions. The exit fees etc. are not too bad and yes we are run under the retirement act. I am the youngest here at 59, and hope to have a long and happy life here. And so far I am very happy here. pretty much everybody that lives here is really happy. This village really is the way it was meant to originally be run etc. until the greedy big companies took over many of them. There still are the private run places like mine around. You need to "shop" around. They aren't all bad.
johnp
6th Mar 2018
11:35am
Which one are you in leek ? Be good to know so can look and consider it
Aveo Class Action
6th Mar 2018
9:47am
There are no costs to join the class action which is open to residents and the families and estates of former residents. To participate and find out more, please contact Ms Svetlana Collantes at Levitt Robinson by email scollantes@levittrobinson.com or phone (02) 9286 3133
Arisaid
6th Mar 2018
12:04pm
REGIS is part of AVEO. I have told my family I am NOT to go into a retirement or nursing home. Don't care where I go just not there!! They appear to me to be just money making concerns. A bit like childcare centres but at the opposite end of your life.


Join YOURLifeChoices, it’s free

  • Receive our daily enewsletter
  • Enter competitions
  • Comment on articles