Why leaving a retirement village can cost thousands

FOR Marcia Machen, getting into a retirement village was easy. Getting out, though, has become a nightmare.

TRAPPED: Marcia Machen says there are too many tricky clauses when it comes to buying in retirement villages. Picture: Crystal Jones

FOR Marcia Machen, getting into a retirement village was easy. Getting out, though, has become a nightmare.

Mrs Machen said when she moved to Bundaberg from Victoria, she believed her lawyer had sorted out all the terms and conditions of her Sugarland Gardens unit purchase.

But wanting to move again to be closer to family, Mrs Machen found a maze of regulations.

Mrs Machen says she'll have to part with about $100,000 to leave after she factors in a $46,080 exit fee and other costs including finding a temporary place to live while the village sells her home after a three-month waiting period.

The worst part, she says, is it's all legal.

"There was so much to read," she says of first seeing her contract.

"But I felt reassured when they said the exit fee would be 5%."

That fee would be 18% by the time she decided to move on, Mrs Machen said.

"I signed a contract that I didn't realise the content of," she said.

Mrs Machen said her payment for the unit was essentially an interest-free loan and to get her money back, she'd have to wait for the village to sell it on to another buyer.

Some units in the complex, she says, have been empty for up to a decade and she's not allowed to live in it while it's for sale.

Mrs Machen said residents were expected to pay for any maintenance to their units before sale.

In addition, general maintenance fees to cover costs on the empty unit will be charged at $500 a month for three months then $250 a month for six months, she says, adding that she believes the necessary works on the unit to make it fit for resale could be done in one week, not 12.

"It costs them nothing but all the cost is on our side, it's really unfair," she said.

"Now I feel tricked as a lot of people do in this village, they feel chained."

Mrs Machen was told by Sugarland Gardens, which was bought by Churches of Christ Care in 2016, that living in the unit while it was for sale was unacceptable because, among other reasons, people could see her personal belongings.

While happy with the village and its staff, issues around leaving are in urgent need of attention according to Mrs Machen.

"I'll never buy into another village again unless the government does something about it," she said.

When she first moved into the unit, Mrs Machen said blinds needed to be replaced and she carried out about $5000 worth of works under the understanding that money would be refunded, but she says she has since been told only half of that money will make its way back to her.

The list of charges before Mrs Machen can go also includes a $4000 marketing fee on her unit.

Unless her unit sells, she won't be able to pay for another home.

"You don't own the unit at all," she said.

"The law has to be changed."

Legislation applies to the retirement home industry. . Picture: erosera

Churches of Christ Care explains legislation 

CHURCHES of Christ Care responded to the NewsMail's queries about exiting their accommodation.

A spokesperson for the group said to give exact responses, they would need to investigate the actual contract held by Mrs Machen. However, they said they had not "amended any prior residence contract exit fees since acquisition".

CofCC says the Queensland Retirement Villages Act Section 104 sets out resident liability to pay ongoing general service charges.

Legislation states that residents of retirement villages are required to pay for general services to their accommodation until either the right to reside in the accommodation is sold, a period of 90 days goes past or if the tribunal orders the operator to pay the former resident's exit entitlement under section 171.

Section 171 applies if an operator fails to comply with various sections of legislation or if a resident is materially prejudiced by the failure.

Churches of Christ Care contracts provide that internal maintenance is met from the Maintenance Reserve Fund, which is a fund required under the Queensland Retirement Villages Act and defined by the Quantity Surveyor's annual report.

"Such repairs exclude items that sustain accelerated damage or items that have been installed by resident personal choice as modifications," the spokesperson said.

"Churches of Christ Care staff are available to assist residents in understanding their contracts entered into under the previous owner and to discuss options available to them."

The Queensland Retirement Villages Act sets a 90-day time line for the refurbishment of vacant units.

CofCC said contracts could be different, and while some may ask for residents to pay for all their own repairs, others allowed for sharing the cost.

Regarding marketing fees upon leaving, CofCC said since acquisition, CofCC does not require a marketing fee from residents.

Federal Opposition Leader Bill Shorten speaks at Brothers Sports Club in Bundaberg. Picture: Craig Warhurst

Opposition Leader and senator back calls for change 

MARCIA Machen spoke to Opposition Leader Bill Shorten and Labor senator Anthony Chisholm when they visited Bundaberg.

On the night, Mr Shorten heard Mrs Machen's concerns and said anyone listening to her story would have to agree it was very unfair.

"The current system is clearly not working and is causing people like Ms Machen undue stress," Senator Chisholm told the NewsMail.

"While state and territory governments are responsible for regulation of retirement living facilities, it is clear a national approach is now needed."

"Labor has called on the Turnbull Government to review the regulation of retirement living contracts, particularly whether the use of exit fees and other associated fees should be abolished."

Mr Chisholm said he would contact Sugarland Gardens.

"I will be personally writing a letter to the retirement living operators to enquire into the case of Ms Machen, to get to the bottom of this," he said.
 

Originally published as Why leaving a retirement village can cost thousands