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Senior lawyer calls for action on retirement village exit fees at QLD LNP Convention

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Attwood Marshall Lawyers Senior Associate and Accredited Aged Care Professional Debbie Sage has won unanimous support at the LNP Convention for proposing an urgent review into the legislation and structures regarding exit fees charged by retirement villages. Debbie calls for stricter rules and regulations on an operator’s entitlement to charge exit fees, especially in the event of closure.

Background

LNP members voted unanimously in favour of a policy resolution put forward by Attwood Marshall Lawyers Senior Associate Debbie Sage on the weekend at the 2023 LNP Convention held at the Royal International Convention Centre (RNA Showgrounds) in Brisbane.

Debbie, a passionate advocate for the rights of the elderly, called for a review of the legislation and structures around exit fees in retirement villages.

She proposed the resolution after hearing several stories from the community where retirement village operators have charged exit fees on residents who have had no choice but to exit their facility after the retirement village closed its doors. These residents are then left without enough money to relocate to another village if they are unable or unwilling to move to another facility owned by the same operator. Instead, they are forced to find alternate accommodation during a rental, housing, and aged care crisis.

Debbie, an Accredited Aged Care Professional, told a packed hall of over 700 people at Brisbane Showgrounds on Saturday 8th July that it should be a legal requirement for residents to be aware of how a closure will impact them financially before they enter into any contractual agreement.

She wants a review into how and when operators charge these fees. The closure of a retirement village is a disruptive and stressful experience for residents, especially if they are elderly and have limited financial resources beyond the capital that is tied up in their unit, she said.

Retirement Village Agreements

When an individual decides to move to a retirement village, they pay what is called an ingoing contribution. However, depending on the type of retirement village model, they may not own the property. Instead, they are usually purchasing a right to reside in the unit and access the village’s facilities.

Residents expect to be able to live there until they can no longer able to do so independently, or they pass away.

Yet operators are currently legally entitled to charge an exit fee, even when a village is closing down, and the resident does not want to leave.

The resident then suffers a massive financial penalty at a time when they need as much money as possible to fund alternate accommodation.

Several bodies have made a fair bit of noise about this topic over the years, but real change still needs to be made.

The Retirement Villages Association recommended as far back as 2012 that the government work with the aged care sector and residents to make sure the legislation clarifies the extent of a resident’s financial obligations in the event of closure.

A 2017 ministerial review of the Retirement Villages Act 1999 also recommended legislative changes to ensure residents were better protected when a village closes.

In the same report, National Seniors Australia and the Association of Residents of QLD Retirement Villages pushed for government regulation too, noting in their consultation response that village closures fall outside the control of residents. Closures, they said, can significantly impact a resident’s ability to afford future housing given their elderly status, fixed incomes, and heavy financial commitment to their existing village.

Need for change

Speaking at the LNP Convention on Saturday, Debbie said that the operators of retirement villages can usually profit after a retirement village closes by redeveloping or selling the land, in addition to charging exit fees. However, residents affected by the closure have no way to recover their losses and should be entitled to compensation.

In New South Wales, there is a provision for compensation payments in the legislation around retirement villages. Queensland should follow suit.

More needs to be done, particularly when there are increased reports in the community of operators charging exit fees and leaving residents needing more money to find alternate accommodation.

There have also been reports of exit fees being charged even when a resident has been relocated to another village owned by the same operator. The resident must then enter a new contract with another ongoing contribution. There is nothing stopping the operator in our existing laws from charging the resident another exit fee.

There needs to be review into not only how an operator charges an exit fee, but when they charge an exit fee, especially in the event of closure.

Debbie said a minimum set of standards should also be introduced as part of the disclosure process, so that before any contractual agreement is entered, operators and residents are both fully aware of their rights and financial obligations in the event of a closure.

Debbie is a passionate advocate of the safety and wellbeing of the elderly community and will continue to push for change and raise awareness about how to better protect the interests of the elderly.

She is no stranger to the LNP Convention. At last year’s event, she also tabled a motion, bringing attention to our inefficient laws for protecting the elderly from abuse.

Debbie also spoke about the campaign to criminalise elder abuse when meeting with the NSW Attorney General Mark Speakman in February 2023. Debbie pointed to recent legislative changes in the ACT, which criminalise abusive conduct towards a vulnerable person and make it an offence for those that care for a vulnerable person to fail to protect them. Debbie also discussed the Elder Abuse Unit which was being trialled down in central New South Wales, highlighting its effectiveness in such a short period of time and pushing the Attorney-General to seek further funding to roll the Unit out across the state.

She wants every state in Australia to make the same legislative changes.

Attwood Marshall Lawyers – supporting people through all stages of life

With many long-standing elderly clients, it is our intent to provide expert knowledge and advice on issues related to elder law, including estate planning, estate administration, estate litigation, transitioning to aged care, and elder abuse.

If you would like to speak to our dedicated elder law team, please contact Wills and Estates and Aged Care Department Manager, Donna Tolley, on direct line 07 5506 8241, email dtolley@attwoodmarshall.com.au or book an appointment online instantly by clicking here.

We also have a 24/7 phone line available which we can be reached on by phoning 1800 621 071.

We look forward to providing further updates on our progress in advocating for change and supporting older Australians.

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Paige Morrison - Media & Marketing - Coordinator

Paige Morrison

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Disclaimer
The contents of this article are considered accurate as at the date of publication. The information contained in this article does not constitute legal advice and is of a general nature only. Readers should seek legal advice about their specific circumstances. 

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