Read the Small Print
Geoff Richards quietly closed the front door of his unit for the last time. The legal letters had been signed; and the retirement village operator – ‘ Aveo’ was about to have its day. Slowly walking down the path with his dog, Tosh, the crumpled 80-year-old glanced back one last time. It was August 2016 and it was the day that Aveo won.
Richards had moved into the retirement village almost six years earlier in December 2010 with Harry Nash, his partner of 55 years. They were in their late 70s and had been seduced by the glossy brochures and promises of low maintenance that come with living in a retirement village.
But things started to unravel when Harry lost his battle with cancer in May 2014. Within weeks of burying him, Geoff received a letter from the developer, Aveo’, informing him that he no longer had the right to remain in the village – this despite the fact that he was the sole beneficiary of Harry’s estate, including the unit.
“Imagine if a husband and wife,” Richards adds, “and one of those died and was the only name on the title. Would they throw out the other surviving partner?”
A joint Fairfax Media-Four Corners investigation into the ASX-listed retirement village juggernaut Aveo can reveal that Richards’ eviction helped them achieve their overall stated business strategy to “turn over” or churn a certain number of residents a year for profit. Fairfax Media-Four Corners has spoken to current and former residents, their children, lawyers, former Aveo staff and lobby groups and has found some questionable business practices at Aveo, including safety issues, misleading marketing and advertising and property sales. But the company’s biggest driver of profit – and behaviour – is exit fees. With 89 retirement villages around the country, which house more than 13,000 retirees, Aveo is one of the biggest retirement village operators in the country. And it makes a lot of money churning residents out of their villages.
Although this article may not be applicable to your particular circumstances, it does serve to demonstrate the importance of both dealing with a reputable organisation or developers; as well as of reading the small print.
For example in most Life-rights agreements the wording specifies that married couples who purchase the ‘right’ to live in a retirement village for the rest of their lives; are guaranteed that even if one spouse dies, the surviving one may continue living in a unit; the only proviso normally being that they must be able to live independently i.e. be able to cope with ADL tasks (Activities of Daily Living tasks).
However what happens in situations where, for example, they have a same-sex partner; or if they allow a friend to move in with them; or if they are looking after a disabled child who lives with them; or if they remarry? And in the latter case imagine the following scenario – on the death of his wife, and the elderly man of 85 years of age, remarries a 25-year-old woman? She is likely to live for another 60 years; which may be fun, but it is not exactly fair on the developer? One can be sure that given the vast number of retirement villages, these situations do arise from time to time – emphasising both the need for developers to use ‘agreements/contracts’ which cover most eventualities – as well for purchasers to read the small print.