CHOICE membership

Retirement Villages Can Be Rip Offs


#1

Just watched Lateline after 4corners program. Executive Officer of Australia Retirement Living Organisation is Clearly in the pocket of AVEO and other retirement organizations. How can he justify his role? he is advocating For the property gougers and NOT supporting Any of the retirement living residents.
Rubbish about cheaper property prices, and exit fees and consistently increased "maintenance’ costs. The contracts are intentionally undecipherable. Also many residents are so intimidated by management they are afraid to be honest on the ‘feedback forms’ for fear of reprisal.
Ben Myers should resign - he has no conscience.
This sector needs a huge shake up - and as this organisation is is not advocating for the vulnerable it must change from the top down or close completely.
Can CHOICE become involved in supporting the residents of retirement villages being exploited by AVEO / Freedom / other for all profit organisations.


#2

Hi @Wend, There is commentary about this topic at


#3

Thanks BBG
I read the previous posts from September 16. Hoping that now 4corners and Lateline have exposed AVEO’s intentional rip off practices more action on all levels will be taken. Appreciate Choice offering information on alternatives.
cheers


#4

I am currently in the US , and saw the Aveo rip off highlights on the ABC news webpage.
My late Parents lived in an Aveo village in Qld which they bought off the plan many years ago. My Father died 20 years ago, and in the next 15, I watched the service decline, the Residents treated as nuiscances, and the costs escalate astonishingly.
It reached a point where there was no onsite Manager… an appalling thing for a ‘Retirement Village’, which promised the earth, but in fact delivered nothing.
When I went to sell the Unit the costs quoted were so outrageous that I was speechless.
I cant say anything absolutely libellous on this page, but am more than happy to privately discuss.
It cost around 50’000 to refurbish, then outrageous ‘Advertising Costs’, which I queried as all the advertising was done via Aveo, then an outrageous exit fee of approx 100’000.
I have not one fond memory of Aveo and would rather set myself alight and go down a river than ever step foot in one of their Villages.


#5

We’ve put together this advice to help consumers navigate the advantages and disadvantages of retirement homes. Let us know what you think.


#6

I feel your pain and share your angst Sandra. My late mum bought a unit 16 years ago, I was overseas. Apparently legal advice was sought but the contract too complicated for anyone to understand and mum was told ‘all retirement villages have the same arrangements’

Everyone at AVEO “Cherry Tree” had to pay the complete unit fee $350,00.00 +? before moving in, plus other costs. (could have purchased a home twice the size in this area for less than $250,000 at the time) Then there were quarterly fees $700? (management, community hall, bus?) plus fortnightly fees (gardens, bin collection) $200?
Whenever there was a residents meeting it seemed it was about an increase in fees and NoOne Dared to say anything. Everyone knew there would be trouble for anyone who spoke up. The increase in fees were said to cover expenses such as costs of expansion and developing new units!

When mum died after 9 years at Cherry Tree, I was told 1. AVEO was owed $10,000 for Every Year she lived there.
2. The unit had to be sold by AVEO. 3. They wanted $30,000 to refurbish. 4. AVEO valued the unit at $400,000 5. Selling agent fee and advertising $$$$ 6. Then quarterly and fortnightly fees had to be paid until the unit was sold!

No investment gains were passed on, After the unit was sold and costs of $100,000 or : 25% were deducted we inherited less than $300,000. While house prices in Melbourne soared AVEO made huge profits but the value of her property to us was worth $50,000 less than she paid for it 9 years earlier! Mum paid about $35,000 a year on top of her home purchase to live in AVEO plus utilities and council rates. I think she and a friend could have spent their time living on a cruise ship sailing around the world in style and with all costs included for about the same costs as buying into and paying fees to AVEO.

AVEO is arranged for outright and blatant exploitation. There needs to be urgent overhaul of ‘retirement village’ costs and fees. I would love there to be a class action against AVEO for 1. Making contracts deliberately obtuse, therefore misleading potential residents about costs. 2. Constantly and unjustifiably increasing costs while not passing on capital gains and now apparently expecting residents to cover any capital losses! 3. Not providing services and support as paid for.

Fair Go AVEO. It seems the owner has as much honour as his father and will also end up in jail.


#7

Hi Brendan I replied via email earlier today as couldn’t log in at the time :
“Thanks Brendan,
good article by Andy Kollmorgen, comprehensively covers most of the issues.
As well as the share your story option can choice also have a petition for clearer contracts as per recommendations?
Also be good to add a bit about why many are attracted to living in
retirement villages (safety, community, downsizing… and the advertising
con of “being looked after by caring staff”) and where can receive the
same if stay in own home or move to alternatives
cheers wendy”


#8

Thanks @wend, appreciate the thoughts. All good points and I’ll be sure to share your thoughts with my colleagues as we’re sure to be involved in these issues in the future.


#9

The response from that Executive Officer, or whatever title he glorifies in, on Lateline was appalling. He was trying to justify the impossible. All he could do was repeat the same mantra over and over again that they have 182.000 (or whatever the number) of residents and their surveys show that all of them are happy. He was so unconvincing.
I’ll bet if they conducted a proper audited survey of past and present residents and more particularly, their families, they wouldn’t find too many supporters.
The Federal Government is asleep at the wheel, just the same as it was with the private training colleges. The only difference this time is that it’s elderly people being ripped off rather than taxpayers.
The senior people in Aveo deserve to be jailed.


#10

I doubt that. They more correctly appear to purposefully avoid doing anything to impact on the profitability of their supporters, all while wide awake. Simple as that. Follow the money. In spite of significant evidence to the contrary they remain dug in that business can always be trusted to regulate itself, even when it cannot.

The ongoing insulting naivety to our intelligence is priceless. The most dull persons in the country could see the wide open doors for abuse without recompense, but regardless this government soldiers on in faux denial until it is to the wall and might lose a vote.


#11

WOW. What a great story by Adel Ferguson on 4 Corners re AVEO. I was in a situation with my mother being a resident of Aveo. She bought a unit at AVEO for $135.000, 4 1/2 years later she had to go into a nursing home. She had to pay a maintenance fee of nearly $2000 a month until the unit was sold. Ten months after vacating Aveo made an offer to purchase the unit for $105.000. Which was agreed on. Then the deductions
came in as per agreements that my 92 year mother had signed and not checked.33 1/3% to AVEO plus 3%
management fees, less $2000 a month for 10 months maintenance fees, end result she received $48,000.
Not a bad result for AVEO. We have accepted.this as there is no way around it.But I would like anyone going into these types of places to read every line of every contract and to include your friends and family members to confirm you decision is the right one. It would be nice to know how much AVEO pay Federal and State governments so they can turn a blind eye? so these rip offs can be swept under the table.
Gary


#12

Here Here @TheBBG Spot on analysis of the Govt issue except I don’t think they think business will regulate it self, my instinct and cynical nature says it is because Business is good for their pockets (as you mentioned) and the masses can go to the dogs.


#13

I agree kortravel99
I also think the Federal government need to be investigated for negligence.
The more we hold those responsible accountable the less likely these corporations can buy their support - I hope!


#14

The 4-corners program revealed a disgraceful state of affairs and I wonder if the contract conditions were challenged whether a court would enforce them.


#15

My mother moved into a unit that is managed and owned by Lend Lease. She on the other hand is a very happy lady. She (and I) know very well she has bought a ‘lifestyle’ and not a title and that me and my three siblings would not expect much to come out of the sale of her ‘lifestyle’ when she either passes or needs extra care. When we did get a solicitor initially, he warned her (as he read and handed out the paperwork) and said that “this is the worst financial decision you will ever make in your life”. My mum said… “where do I sign?”.

We are lucky that she does not feel ‘trapped’ as some of the Aveo residents have been suggesting. It does have a lovely sense of a quiet, safe, village feel to it and the unit itself is really nice with surrounding maintainable gardens. She has access to the centre and its facilities, library, pool and luncheon. But she rarely visits other than the centre’s hairdresser.

However I do understand that really, the exit percentage fees coupled with the need to upgrade the unit each time someone moves out is somewhat ridiculous. I cannot imagine the government has the power to invade everybody’s contract and change it, … although I hope so. As this ‘complaint’ will not go away only exacerbate with increasing population of baby boomers coming through. Aveo and the likes should look into other ways they can reap their profits, revise their monthly fees, exit deals and just be a bit kinder to the elderly. This generation (war generation) have had it hard and it can only be good publicity to the companies concerned if they can come up with a better solution.

Cheers


#16

I hope your mum continues to enjoy this ‘lifestyle’ and when / if she needs to move out for extra care there will be enough funds for that. The profits AVEO and similar are reaping are beyond excessive - it’s tragic that they are gouged from the elderly who may need extra funds for nursing home care. Let’s hope they find a conscience!


#17

I am a lady on her own in an Aveo Village (for more than 10yrs) if I moved now, I would just be able to afford a caravan with the money I would be left with.
I paid $200,000, the unit is now worth double that, I get back what I paid, less 30%, charges and fees for this and that you would not believe. They are talking about the “Aveo Way” contracts, however these are only for new residents. Us older residents are stuck with our outdated Contracts. When I originally went to see a Solicitor to come here, he took one look at the telephone book sized Contract, and said "Oh you don’t expect me to read all this do you? I have no idea where figures are concerned (my Husband did everything like that) at the time I thought the Solicitor being a Senior himself would know the “ins and outs” of all this, how wrong was I.
By the way I have a two bedroom Unit, my monthly fees are nearly $700 now, ($200 when I moved in)
they cover Rates and Water, however the Management will not pass on the deduction our Council gives for Pensioners (too much trouble) the Residents Committee have tried and tried to get this without any luck) It is so scary to see your money dwindling, and not knowing how long you are going to be alive to need it.


#18

I forgot a very important part of my above sermon. Aveo get the $200,000 that is the increase in Value of the unit, before all the other things happen.


#19

Thanks for telling us about your situation Shorthair1. AVEO appears unbelievably dishonest and all the factors you mentioned were the same for my mum - these are the elements to be highlighted in a true AVEO advertisement!
I hope a class action is arranged and the contracts are made ethical. AVEO can afford to at least be reasonable if they had any honour. Good Luck and Good health Shorthair1


#20

Thank you to 4 Corners … so many other retirement home companies are almost as cruel as Aveo …