With an incendiary preview video, and a 24-hour social media onslaught, the 18 minute broadcast by the national broadcaster was illuminating in its failure to appropriate responsibility to the correct party – the residents.
The TV program, with supporting social and other ABC medias, all concentrated on the supposition that new residents ‘buy a home’, and when they depart they do not receive the same value plus an uplift, as they would if they purchased a freehold or strata titled home.
These are the contracts residents sign up by them and they are structured such that they support the resident well beyond what they would receive at home.
Most of the actual aggrieved people interviewed were the family of the village resident.
The interviewer, Adele Ferguson, said she has been investigating the sector for a decade. She did not say that she respects older people (70+ is not that old) can have the freedom and respect of ‘dignity of risk’ – they cant all be expected to make mature decisions themselves.
She also chose not to recognise that the operator does not make a profit until the person leaves the village, the profit being the DMF.
Nor does she say the contract is a lease or loan/licence, and like all leases, the tenant has to make good and pay the lease (weekly fees) until a new lessee is contracted.
And she does not mention that 35% of all village homes are owned and operated by Not For Profit church and charities on the same contracts as private operators.
All retirement living operators advise a potential resident to seek legal and financial advice before signing a contract, to have it fully explained to them by a third party, the same way you would seek advice when buying a home.
Every resident should be fully aware of their ingoing contribution, weekly fees and the exit fee.
The cost to get legal advice would be $3,000+ and it is worth every cent.
Most states in Australia provide village comparison documents to help prospective residents make informed decisions and compare different villages based on standardised criteria, making it easier to understand the financial obligations and benefits each village offers.
Today the Tranquil Waters DMF is 36%. It is owned by the Wells family, who also own Ormiston Rise at Ormiston.
Last night's story and the social media coverage (The ABC limited comments) will hurt the reputation of retirement village operators but with available homes few and far between, it will not have anything like the effect of the 2017 broadcast by the taxpayer-funded organisation and the then Fairfax newspapers.
‘Bleed them dry until they die’ demolished most village sector sales by up to 30% which dragged out for three years and by our back of envelope estimation that cost to the village sector was $2 billion plus.
The retirement living sector will be untouched but the broadcast is a warning to every operator. Consider your village managers and community managers have the latest management training from DCM Institute, Australia's largest management development program, and make sure the residents are fully occupied.
