Not so standard

SENIORS should seek independent legal and financial advice before signing complex retirement village contracts, says Consumer Protection.

Substantial exit fees of up to 30 per cent often come as a nasty surprise when residents have to sell up and move into aged care.

“When they terminate their residence contract it will usually be subject to a range of conditions and substantial exit fees,” says CP acting commissioner David Hillyard

“There can also be long delays in receiving their refund amount if they do move out or relocate to a new facility.

“Retirement village contracts are more complex than the usual documents relating to the purchase/sale of residential housing or residential tenancy.

• National Seniors chief advocate Ian Henschke

“Most retirement village contracts are also ‘standard form’ – this means they will be put to residents on a ‘take it or leave it’ basis, without any real opportunity for them to negotiate changes they may want.”

Mr Hillyard says his agency’s Seniors Housing Advisory Centre is regularly contacted by elderly people surprised or baffled by the terms of their contract.

Earlier this year, the commerce department introduced a new requirement for developers to provide all potential buyers with a statement outlining the costs and conditions of the contract.

But National Seniors chief advocate Ian Henschke says legal advice is still a must.

“National Seniors also has long been concerned about the complexity of contracts for older people moving into residential aged care, not only in Western Australia but also nationally,” he says

“Two years ago, WA amended its laws to give more protection to residents of retirement villages, with the changes in line with those of other states.

“But retirement village contracts remain complex documents and people should seek expert advice before signing them.”

Recently a number of WA councils that owned retirement homes starting pulling out of the sector due to rising maintenance costs (many villages were built in the 1970s) and sold them to private operators.

Mr Hillyard says all operators are subject to the same legislation, regardless of whether they are local government authorities, not-for-profit operators or for-profit businesses.

“Any residence contract entered into by a resident and a retirement village operator is binding on any new owner of a retirement village in the event of a sale,” he says.

“Seniors who contact the SHAC often report that they would like to “right size” into a newer property in the area where they have lived.

“However, they struggle to navigate the details of a variety of options available to them. “SHAC provides a service to assist potential buyers understand all the issues and options they face.”


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