Retirement village operators are coming under closer scrutiny.
One sector that isn’t starved of attention at the moment is the retirement living industry, with multiple state inquiries, consumer watchdogs and legal firms probing the way it is managed.
Late yesterday in the Federal Court in Melbourne, law firm Levitt Robinson launched a class action in the Federal Court in Melbourne against operator Aveo on behalf of village residents.
Announcing the move, principal Stewart Levitt said: “The entry of a Johnny-come late-lately competitor onto the scene, led to the decision to bite the bullet and file an open class action.”
The firm was spurred to act after rivals Maurice and Blackburn also yesterday said it would begin registering interested parties ahead of conducting its own class action.
On the Government front, the latest to join the queue prying into the affairs of village operators is NSW Minister for Innovation and Better Regulation Matthew Kean, who last week ordered his own inquiry.
The Minister said an investigation was warranted because of “concerns raised about the fairness and transparency of business practices of retirement villages”.
Long-time social advocate Kathryn Greiner, former Premier Nick’s ex-wife, will lead the review. Among the issues on which she has just 90 days to report are whether retirement village marketing activities are being conducted honestly and diligently.
She will also be able to flag potential breaches of the law which should be referred for further investigation.
Meanwhile, the Victorian Government’s recent response to its own inquiry findings was criticised for failing to take strong action on the ‘serious’ issues raised in nearly 800 submissions.
Four advocacy groups have condemned the response, saying: “Despite … recommendations that promised meaningful reform, the pleas of residents have fallen on deaf ears, with many of the proposed reforms pushed off into the long grass of more reviews.”
Joined by Residents of Retirement Villages Victoria, Council on the Ageing and Housing for the Aged Action Group, the Consumer Action Law Centre (CALC) said the Government’s position “failed to remedy the serious problems’’.
Other the shortfalls the group identified were the lack of support for an independent ombudsman to hear disputes that residents could not resolve with their retirement housing provider.
“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,” CALC said.
The Queensland Government has also recently introduced legislation to ‘safeguard’ village residents’ rights, but CALC says the new laws merely entrench village operators’ business as usual practices.
It certainly is wholly unacceptable for governments long deaf to the plight of retirement village residents to conclude their enquiries with an arrogant and dismissive ‘nothing to see here’ stance.
Well a bunch of law firms have been watching and they think there is plenty to see. Not to be gazumped, Stewart Levitt launched its no-win, no-fee class action saying: “We are sharpening our scalpels, with a view to embarking on corrective legal surgery in relation to further industry victims.”
Yesterday, class action specialists Maurice Blackburn belatedly also recognised that there is a potential injustice being carried out against retirement village residents. The firm told YourLifeChoices that among other things, it was looking at “deferred management/exit fees … terms which require residents to pay up to 35 to 40 per cent of the property value accruing over two to three years’’.
Levitt Robinson, which is representing around 200 residents, countered by revealing it had invited Maurice Blackburn last week to join it in its Aveo suit but changed its mind when terms could not be agreed on.
“Levitt Robinson are so much more advanced in the case and because of the different fee structures of the firms, we decided it would be too problematic to share the load under these circumstances,” principal Steward Levitt told YourLifeChoices.
In July, Mr Levitt told YourLifeChoices he would “put a blowtorch to the belly of a sector imposing unconscionable conditions on retirees”.
I wish him well and hope that the Australian Competition and Consumer Commission (ACCC) does the same when it runs its ruler over Aveo’s business practices.
Yesterday, the ACCC confirmed to YourLifeChoices that its investigation into Aveo was ongoing.
There are three main areas the ACCC will investigate: misleading conduct, unfair contract terms and unconscionable conduct.
That’s all very nice. But really it’s a job state governments should have been doing all along and one which was no more timely than now to address. Aren’t state governments embarrassed by their failed duty of care to some of the most vulnerable Australians?
These yellow-bellied politicians who are beholden to the retirement village sectors’ big players should hang their heads in shame.
As CALC told us yesterday, the government reviews so far merely address disclosure. They fail to go to the underlying problems with the business models of retirement village operators.
That’s just not good enough for thousands of retirees spending their twilight years in financial and emotional distress while governments fiddle.
‘Rome’ is burning and its elderly citizens are running out of time.
Have you been treated unfairly by a retirement village contract? Should exit fees from villages be banned? Should the Federal Government take control of the sector?