By Carrie Cox
Calls for national regulation of the retirement village sector in the wake of a damning media expose in mid-2017 are unfounded when it comes to the WA experience, according to one of the state’s largest independent legal firms.
A joint investigation by the ABC's Four Corners and Fairfax Media into east-coast retirement village company Aveo uncovered exorbitant fees, complex contracts and “questionable practices” at the expense of elderly Australians.
Labor, the Greens and the Australian Competition and Consumer Commission immediately called for a federal inquiry into the industry and subsequent discussion has focused on the introduction of a ‘one-size-fits-all’ national regulation scheme.
But WA firm Jackson McDonald, which represents owners and operators of retirement villages and individual clients in the drafting of contracts, says a national approach would not be the best way forward for this state.
Partner Simon Moen, who specialises in senior living law and won Australian Lawyer of the Year 2017 for his work in the sector, told Business Pulse it would be wrong to tarnish WA retirement village operators with the same brush as those highlighted in last year’s media investigations.
“The issues that we have seen on the east coast do not apply to WA,” Moen says. “WA has its own state-based property laws that deal with real estate. The ownership mix of the sector in WA is different to the eastern states. The adoption by WA of the same laws as those over east might suggest that the same issues that apply there apply here – they do not.
“I am cautious about the adoption of a one-size-fits-all approach (and) I think seniors would object to being treated as all the same. It’s important that the law permits diversity of choice for residents and does not stifle the introduction of innovative, cost-effective alternatives.
“There is a wide variety of operators in the sector and they offer different village amenity, experiences and have different fee structures. This is what one should expect because the seniors cohort is a diverse group.”
Moen says WA’s own regulatory framework for the retirement village sector is sufficiently robust to adequately protect residents.
“There have been a raft of changes at both state and federal level that have benefitted residents in retirement villages,” Moen explains. “At the state level over the past five years, the rules in relation to the content of residence contracts have been substantially upgraded and modernised. These consumer-friendly changes allow for more meaningful village comparisons by prospective residents.
“At a federal level, the Australian Consumer Law has had a positive impact on residence contracts for both residents and village owners and operators.
“There are significant legal sanctions for operators who produce documents that fail to comply with the law or who fail to comply with the law in relation to such matters as disclosure time periods and residents’ cooling-off rights.
“I would caution against further changes to residence contracts at this time. There are a number of reviews underway in other states and at a federal level. It’s also fair to say that, in our experience, village owners have been proactively seeking legal advice to ensure their contracts are in order.”
Moen says the WA sector and the State Government are currently taking a ‘watch and wait’ approach to movements on the east coast and at federal level.
While Moen rejects the idea amplified by last year’s media flare-ups that retirement village contracts are unnecessarily wieldy and complicated, he does believe a legal eye is essential to avoid misunderstandings.
“For residents, it’s important to obtain advice so that they understand the documents being signed,” he says. “Financial advice is also important because a decision to sell the family home and move to another residence may have pension eligibility implications.
“One of the challenges for village owners is that the residence contract has two readers – that being the resident and, sometime later, their children. Knowing that the resident received independent advice is of value to village owners when dealing with children who may be confused or have misunderstood the documentation that their parents made an informed decision to sign.”
Simon Moen says the biggest challenge now facing WA’s retirement living sector isn’t regulation but rather the need for rapid expansion.
According to an ABC report in December, the state is facing a major shortage in senior living options as the population make-up rapidly shifts – a massive 16 per cent of WA will be aged over 65 in the next 20 years.
Former Property Council of WA executive director Joe Lenzo said the current rate of development would not keep pace with WA’s ageing population.
“The real issue is the way the industry is overly regulated right now,” he said.
"At the moment in WA we have about 14,000 units for people to move into as a retirement ... we need to double that within 10 years and we're not going to achieve that.”
Moen agrees. “We need to be planning now for the shortage,” he says. “There are simply not enough appropriately priced and designed products for seniors.
“Retirement villages have a key role to play in keeping pressure off the aged care system and they can achieve economies of scale that other living options simply can’t. So these are important issues that we must deal with as a state.”
Did you know?
About five per cent of retirees move into retirement villages across Australia, but that figure is set to grow to about seven per cent. In WA, an extra 24,000 retirement village units will need to be built over the next 10-15 years – a 75 per cent increase on the current level of stock. (Source: Property Council of WA and ABC Online)
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