Retirement village life costly to leave and for some, toxic to stay

Retirees want the government to stop retirement villages taking so much of their hard-earned savings and to protect them from bully operators.

Retirement village residents are calling for an overhaul of the industry to stop operators “digging into residents’ wallets”.

The South Australian Retirement Villages Residents Association (SARVRA) also wants mandatory “education” programs to weed out what it says is a “toxic culture” of bullying and intimidation among some village operators.

The 9500-strong association recommends sweeping changes in its submission to a Retirement Villages Act review.

SARVRA president Bob Ainsworth said residents who moved out of a retirement village could lose almost half the sales price in fees before also paying marketing expenses, refurbishment and maintenance costs.

Departing residents had to wait up to 18 months to get any money back if their property did not resell sooner. The association wants the operator to be forced to buy the property back within six months.

Usually, 25 per cent of the sale price is kept as the operator’s profit. Departing residents also pay maintenance fees for six months after leaving, unless the property is sold sooner. SARVRA wants to cap this at three months.

SARVRA president Bob Ainsworth said residents who moved out of a retirement village could lose almost half the sales price in fees before also paying marketing expenses, refurbishment and maintenance costs. Picture: iStock

In addition, residents of some villages have had an uncapped obligation to pay up to 1.5 per cent of the sale price for every year they lived in the village, with this money going to a capital items replacement fund. SARVRA wants this capped at 10 years.

It also wants the Act to prevent salaried village staff from charging a sales commission and marketing fees for finding a new resident.

“There’s such an imbalance in the industry that favours the operators,” Mr Ainsworth said.

“It’s a licence to print money. Retirement village living is a great life; it suits some people but once you’re in, you can’t (easily) get out.

“You’ve got these penalties to get out. We’re not complaining. All we’re asking for is a better balance – a fairer way to get out.”

SARVRA is also calling for the ability to add a new partner from the same village to the residence contract without having to pay exit fees and begin again.

Mr Ainsworth said he was “deeply concerned” about the culture at a small number of villages, where residents were fearful of speaking up.

“Bullying and intimidation are the management tool of choice in these villages,” he said. “They won’t go away unless the industry embarks on a pathway of cultural change.”

Retirement living is enjoyable until it’s time to leave, says a residents’ association.

SARVRA wants mandatory learning programs.

About 26,400 people live across 540 retirement villages in SA. More than half live in 127 villages run by commercial operators.

The Retirement Living Council, a division of the Property Council, represents 60 per cent of operators in SA and has lodged a submission arguing for the mandatory buyback of a property to remain at 18 months.

Property Council state executive director Daniel Gannon said many larger operators already stumped up the money before reselling a property. “For small operators, a six-month mandatory buyback would just drive them out of business,” he said.

“We just don’t think it’s equitable for all operators.” He said the Retirement Living Council had a code of conduct and 49 member villages were complying with it.

COTA SA chief executive Jane Mussared said there was a small group of operators who “pay too little attention to the management of relationships with residents”. “That makes or breaks a resident’s experience,” she said.

A report on the review of the Act is due to be tabled in parliament later in the year.