Retirement village living: the good, the bad and the (downright) ugly

The Ugly

Retirement villages are big news at the moment. Adele Ferguson and Sarah Danckert's exposé which appeared online and in The Age newspaper this past Saturday highlighted the avaricious practices and so-called 'asset-stripping' of older consumers currently being undertaken by Aveo the ASX-listed retirement village 'juggernaut'. This week's Fairfax Media-Four Corners' joint investigation and program Bleed Them Dry Until They Die adds more depth and complexity to the issue.

After years of consumers getting nowhere with their complaints, the Four Corners report is the culmination of a groundswell of awareness which resulted in the Victorian Government's Public Inquiry into the Retirement Housing Sector which began at the end of May 2015. This Inquiry was tasked to 'inquire into, consider and report'…

…on the operation and regulation of the retirement housing sector (including retirement villages, caravan parks, residential parks and independent living units) with the aim of identifying opportunities for improvement and reform

The Inquiry received a total of 766 submissions from (mostly) consumers and a range of other organisations including advocacy bodies, retirement village associations and naturally, a few of the key players amongst retirement village owners/operators. The Inquiry also heard from 90 witnesses at a series of public hearings, reflecting the enormity of this issue and the depth of feeling surrounding it.

The Good

The Inquiry's report released at the end of March 2016, detailed the extensive nature of the complaints against retirement village operators and, in particular, the difficulties residents' face in terms of their residential contracts and the ways in which disputes are solved/resolved. The recent (independent) research undertaken for the Residents of Retirement Villages Victoria by the National Ageing Research Institute – and one of the submissions to the Inquiry – also highlighted that the issue is not that clear cut.

The results of the study – an anonymous survey – showed that, even despite the difficulties, many village residents are generally satisfied with retirement village life, a result also found by previous industry-sponsored reports. In fact, with results from nearly 2000 village residents NARI's report (Submission 687: Appendix E) shows that, overall, residents were satisfied with life in retirement villages. This finding is endorsed by other research previously published by The Conversation which highlights the benefits to older adults of other congregate housing options such as co-housing or co-living arrangements.

The Bad

The problem for many residents is they feel powerless against big, corporate giants like Aveo; and the current communication and dispute resolution practices between owners/operators and their residents is flawed. As one survey respondent told NARI:

"As far as I am aware the village was sold and a new manager installed without any interaction or consultation with members of the village"

"Dispute over faulty structure. Still awaiting resolution on this problem! Management could be more transparent in their actions towards owner/residents, bullying & harassment by village manager. Not resolved by Management. Need ombudsman to handle complaints"

Another problem is that residents don't usually have the money or, in many cases, the emotional tenacity to take owners/operators to task – or even to court. And even if they wanted to, the law – as well as the convoluted and obtuse residential contracts which residents sign, despite many not understanding the implications of what exactly they are signing – means they don't have a leg to stand on. The Victorian legislation currently governing this sector is the Retirement Villages Act 1986 and many feel it is outdated and does not adequately protect residents.

Going forward

The report from the Public Inquiry makes a total of 15 recommendations, one of which is to review the current Act and the other is to introduce a Retirement Housing Ombudsman (page 89):

The Committee believes that a Retirement Housing Ombudsman should be introduced… This model could be in the form of a newly created position or, ideally, created by extending the powers of an existing body, such as the Consumer and Business Ombudsman.

A review of the Act and the introduction of a Retirement Housing Ombudsman, as well as the introduction of other recommendations such as mandatory accreditation for retirement village providers and certification of village managers would go a long way to re-establish trust in the retirement village housing model. With the current media airing of what Alan Kohler has previously termed the 'retirement village rorts', a vast amount of bridge-mending is required by the industry – and fast.