HomePropertyDraft strips retirees’ rights

Draft strips retirees’ rights

Senior residents have slammed proposed Victorian legislation for the retirement village sector saying it reinforces big companies’ power to lord over those who own freehold titles in their communities.

Late last week, the Victorian minister with oversight for the retirement village sector, Marlene Kairouz, released a long overdue draft of laws aimed at clarifying the rights and obligations of retirement village managers and residents.

The proposed laws follow a lengthy inquiry into whether retirement village residents were being exploited by corporate managers in the sector.

A recent joint Fairfax News and ABC Four Corners probe revealed many residents were being discriminated against by Aveo, one of the larger retirement village operators, through complex contracts and reported gouging with high fees.

YourLifeChoices has asked the Minister’s office to clarify what appears to be a capitulation to the interests of large retirement village managers over the rights of freehold owners.

Residents have told YourLifeChoices that the draft laws are full of flaws that will inevitably lead to the erosion of their rights. They said this was not what they expected after lobbying for greater transparency of village managers’ obligations to protect the rights of unit owners.

One resident said Minister Kairouz’s draft laws are so ineptly worded that they confuse freehold owners with management companies that are merely contracted to operate villages.

Among the contentious clauses in the proposed legislation is the right bestowed on a management company to eject a freehold owner of a village unit.

Ms Jan Reilly, an owner at Aveo Northcote’s Veronica Gardens, said the draft states that she can be forcibly removed from her home to another location if the management deems it appropriate.

“If (the owner and or manager) exercises a right to relocate the resident to other premises with the consent of the resident, the resident must not withhold consent unreasonably,” Ms Reilly said about the laws.

In a letter to local MP Fiona Richardson, she wrote: “I am bringing this to your attention because I am appalled that the regulations give this much power to the manager.

“As a resident I can be seen to be behaving ‘unreasonably’ if I don’t want to move elsewhere,” she wrote.

Former Australian diplomat John Lander said he was forced to exit his freehold unit after being treated unfairly by Aveo management.

Recently, Mr Lander told federal opposition MP for Batman David Feeney that if the proposed Victorian legislation was enacted “it would make the already bad situation even worse”.

“The draft reads as if it were written by the industry operators and not from the perspective of the retirees.  It does not go anywhere near resolving the conflict between the rights of a freehold owner and the company’s aim to extract maximum profit from the property,” he said.

When Mr Feeney met with Veronica Gardens residents recently, he told them the federal Labor Party wanted to lobby the Turnbull government to adopt nationwide rules to protect retirement village residents.

“It is astonishing that the Victorian Government would draft legislation to make lawful the infringement of existing rights,” Mr Lander said.

“The proposed controls and restrictions on retirement village residences are only defensible if the residences are owned by the company and not by the resident,” Mr Lander said.

“In the current form of the draft the term ‘owner’ is used solely to describe a party who is a manager of a retirement village. This is totally inadequate … I refer to those people who hold a freehold title to their units and as such are owners.

“Because the term ‘owner’ is used in the draft only to indicate a person or entity who is managing a village, the clauses using the term do not apply to freehold owners and therefore provide protection for managers and not residents,” he said.

“In view of this, this draft needs a major rewrite, or an entirely new document needs to be written which recognises the freehold title ownership of residents and protects their rights.

“They do not merely hold a ‘right to reside’, they hold a freehold title,” Mr Lander said.

Opinion: The Minister is double-crossing her constituents

A relative of mine has lived in an Aveo retirement village as an independent resident for nearly 12 years. For four of those years I was her proxy on the Owners Corporation Committee and I can attest to the fact that the management thwarted her rights as a freehold title owner.

Just when the Victorian Government had an opportunity to protect the rights of retirement village residents from the gouging ways of managers and operators of these communities, one has to ask why the chance was squandered.

It seems from the reading of Minister Marlene Kairouz’s draft legislation that she has pandered to the vested interests of wealthy companies such as Aveo, among other listed property companies, over and above the vulnerable elderly citizens she was elected to protect.

But worse, Minister Kairouz’s draft ridiculously confuses the definition of an owner of a retirement village unit. Her proposed laws incorrectly define owners as the corporate manager, ignoring the fact that in many cases the owner is a resident with a freehold title.

What ensues is a babble of recommendations wrongfully bestowing rights to the wrong party. Who wrote this draft legislation? Clearly it was not someone who understood the nuances of who ‘owns’ a retirement village property and who ‘operates’ it. Two very distinct propositions.

What is more galling is that this example of the Government’s ineptitude comes against the backdrop of an Australian Competition and Consumer Commission investigation into Aveo and the wider retirement village sector.

That probe was prompted after revelations that some operators were treating residents very  poorly.

The bottom line is that this proposed legislation is ridiculously ignorant of how the sector works in reality. The minister and her minions need to go back to the drawing board.

Over the coming days, weeks and months, YourLifeChoices will be putting the blow torch to the belly of a government who is in bed with corporate interests, despite the fact that these companies are ripping off the very constituents who elected the government.

Do you have a bad experience after dealing with retirement village operators? Do you feel your rights would be protected by government laws if you bought into a retirement village?

Related articles:
ACCC to investigate Aveo                
Retirement village residents want class action
Minister responds to Aveo scandal

YourLifeChoices Writers
YourLifeChoices Writershttp://www.yourlifechoices.com.au/
YourLifeChoices' team of writers specialise in content that helps Australian over-50s make better decisions about wealth, health, travel and life. It's all in the name. For 22 years, we've been helping older Australians live their best lives.
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