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ARQRV Newsletters

The website has links to Newsletters for the current and previous year. The information contained in these Newsletters is up-to-date, and residents can read about recent and on-going disputes at the Mediation and Tribunal stages. Submissions and meetings dealing with the legislation governing Retirement Villages are also outlined in the Newsletters. Articles on financial matters which are important for residents can also be found in these periodicals. The Newsletter Links are recommended for new members so their knowledge of the Retirement Village Industry is rapidly increased. Our rights as a resident and a consumer under the relevant Acts are outlined in a number of articles.

ARQRV Newsletter Downloads

Newsletter #74
Newsletter #75
Newsletter #76
Newsletter #77
Newsletter #78
Newsletter #79
Newsletter #80
(note: Newsletters are in .pdf format)

 

Heads of Agreement

Retirement Villages Act (RVA) 1999 (QLD)
Before this Act was promulgated community dissatisfaction with the second consultation draft “Retirement Villages Bill 1997” led to a committee comprising ALL relevant stakeholder groups in the Retirement Village Industry to participate in a mediation process from 1998.
The document produced by this committee in 1999 is known as the “Heads of Agreement”. This historic document dealt with
·       Capital Replacement
·       Maintenance / Service Charges
·       Exit Fees
·       Resale of Units
·       Dispute Resolution
·       Other Issues.
Consensus was reached with ALL parties dealing with the issues outlined above. The legislation RVA 1999 incorporates these decisions. Today it is interesting to compare the views of some stakeholder groups in the Retirement Village Industry with those stated in the “Heads of Agreement”. Click on this link to read this important document.
 
 
PRESIDENT’S REPORT
Association of Residents of Queensland Retirement Villages (ARQRV)
AGM 10th September 2010
The President welcomed those in attendance and summarized the year’s activities as follows.
Major Legislative Tasks
·        Attendance at Ministerial Working Parties together with the RVA (Retirement Villages Association), ACQ (Aged Care Queensland) and other major industry stakeholders
·        Review of draft legislation
·        Re-write of the RVA (Retirement Villages Act) Part 7 Division 4 (Resident’s Participation)
·        Sections 127 – 133 inclusive – generally poorly drafted, ambiguous and open to different interpretations
Section (S) 127
·        May more than one resident of a unit be elected to a committee?
·        Are there any restrictions on a committee “deciding its’ own procedures”?
·        Must all residents abide by the Constitution?
·        Do sub-committees, having been appointed by the Committee, have any functions other than those prescribed in S 129?
·        Why are there no rules for the conduct of meetings?
·        Why are Quorums not defined?
·        There are guidelines on the conduct of committee meetings, but none on the meetings of residents.
·        Can a Scheme Operator (SO) chair a meeting of residents?
·        The annual meeting called as prescribed in S 131, must be convened “as soon as practicable” after the annual audited accounts are available. “As soon as practicable” needs to be defined.
·        If the voting entitlement at a particular village is one per unit; and both occupants of a unit are elected to the committee, which person votes or does each one have a vote?
·        Other Parts dealing with Residence Contracts, Scheme Documentation, Operating and Management of Retirement Villages (RVs) and Dispute Resolution; are equally confusing and generate more than 30% of the ARQRV workload.
A major task therefore is to continue the push for further legislative change. The first stage is a complete re-write of the Residents Participation section of the Act.
Ministerial Working Party
A draft amendment bill will be issued later in 2010. Amendments are expected to include the methodology of calculating Exit Fees, which will “clarify” (whatever that means) the process.
·        A number of “drafting errors” will be corrected, such as the Cooling-Off Period and period of written notice required before an increased General Service Charge (GSC) can be applied. Neither of these amendments will however resolve current problems, because the changes will not be retrospective.
Receiverships
·        A number of villages experienced financial problems this year, and entered into Receivership/Administration.
o   Gleneagles-on-the-River - no statutory charge over the land applied on the transfer of ownership from Churches of Christ to Tom Dooley Enterprises.
o   Beachmere Sands – some unregistered leases, Scheme Operator in liquidation, and the village 10% complete.
o   Grande Pacific – premature pay-out of the building bond funds. 20 of 120 units sold. Major structural problems exist.
o   Laurel Springs – failure of the Golden End corporate structure. Residents are attempting to purchase the Freehold component of the village.
o   Heritage Gardens – failure of the Golden End corporate structure.
·        All of the above villages are in Receivership. All of them have Administrators appointed. For the residents this is a very difficult time. There is the uncertainty of a total asset sale, and whether the village assets will cover the total debt.
Trends
·        While it is essential to maintain the viability of the industry; the residents must have effective consumer protection.
·        Sales/resales are down markedly, but there is no noticeable reduction in the costs of incoming income and contributions.
·        Occasional offers of “special discounts” which are then offset by increased Exit Fee percentages, and reduced accrual-to-maximum periods. Re-leasing/re-selling as a Non-Capital Appreciation Lease (NCAL) for a unit originally marketed as a Capital Appreciating Lease (CAL).
Queensland Civil and Administrative Tribunal (QCAT) disputes
·        Financial mismanagement
·        Increase of the General Service Charge (GSC) ABOVE the Consumer Price Index (CPI) without appropriate justification
·        Failure to conduct S 106 (1) compliance check to verify legitimacy of increased charges
·        Retention of Maintenance Reserve Funds (MRF) in Operating Account
·        Incorrect Classification of Expenditure – charging Capital Improvement (CI) replacement costs to MRF, and charging CI to residents
·        Refusal to provide access to documentation
·        Not applying pro-rata charging to Exit Fees
·        Enormous overcharging on Re-instatement costs
·        Threats to terminate Right-to-Reside (residents contract for “material breaches”)
·        Restrictions on Village Land
·        Accreditation costs passed on to residents
Office of Fair Trading matters
·        Organisation is reactive not proactive
·        Letters of complaint – residents receive form letters
·        The Compliance section has become more active recently. Inspections have been conducted at a number of villages following complaints from residents. Some small financial penalties have been applied.
·        Toothless Tigers – with regards to the dispute process. Many determinations are in the applicants favour, but few have any impact on the Operators.  Financial penalties may be applied under the RVA, but are seldom used.
·        Basically the only redress for a resident is to terminate the Resident Contract (RC). However, this is not a realistic solution as it is virtually impossible for most residents to afford this step. The departure of a resident is completely advantageous to the Operator. Residents pay to enter, pay to stay and pay to go! Residents accept the contractual obligations, and expect to live a happy, secure, relaxed, contented lifestyle and meet their contractual obligations. Many Operators act dissimilarly. Inadequate disclosure of the resident’s obligations is the primary cause of most dissatisfaction in villages.
·        Prospective residents need more information on the long term impact of their decision to enter a village; especially the financial cost and the capital loss on exit.
·        ARQRV is developing a broadsheet which will identify the likely Return on Investment after C to R. The broadsheet will be a big task requiring research of more than 7 000 Public Information Documents (PIDs) for the financial penalties, exit fees, re-instatement charges, cost of sales, NCAL and CAL. Major expenses are not readily identified during the “Let’s have a look at that village” phase which most prospective residents approach very casually – to their long term disadvantage.
·        How will a broadsheet help current residents? In the short term perhaps not at all! However, the wide distribution of the spread-sheet, and its availability on the website would allow prospective residents to compare villages on an even footing, and may require Operators to offer more competitive entry conditions.
Unfair Terms in Contracts
·        Bill received assent on July 1st 2010
·        Standard Form Contract classification applies to Resident’s Contracts
·        What is a Standard Form Contract (SFC)?
o   Uneven bargaining power
o   Prepared by one party before presentation to the other
o   Non-negotiable terms
o   One party unable to include new terms and conditions
·        A term is unfair if it:
o   Creates a significant imbalance in rights and obligations of the parties
o   Is not reasonably necessary to protect the interest of the party most advantaged by the term
o   Would cause a deterrent (financial or otherwise) to a party if the term was to be applied
·        Submission to the Attorney-General is required later this year. ARQRV members are requested to advise of any terms they consider unfair. However, no significant response is expected, because the Act will not be retrospective.
Endorsements
·        Energy Efficiency
o   Climate Smart service
o   Solar panel arrays
o   Solar hot water
o   Panel rental now available
Insurance
·        Negotiating with two major insurance companies to determine a Retirement Village specific policy for Contents, Public Liability and other risks. JLT will produce a proposal in the near future. ARQRV representatives are meeting with the General Manager of Village Life in December for a similar discussion. The aim is to obtain competitive premiums and good cover in return for the association endorsing the company. The successful company will also be requested to provide a substantial subsidy toward the production and distribution costs of our Quarterly Newsletters.
Computerisation of Records
·        A sub-contractor has been employed to create an electronic database incorporating search functionality.
Financial matters
·        You have heard the good news from our treasurer. The association is in good shape financially. We will continue to spend wisely and invest prudently. You may expect an increase in our outlays for legal services, and travel costs for the Visits program. There will also be replacement costs for some office equipment. With working capital in excess of $200, 000, no increase in fees is foreseen for the future.
In summary it has been a busy and challenging 12 months. While frustratingly slow in the dispute resolution area there has been delivered a number of decisions beneficial to residents, and others are anticipated in the near future. Generally our relationships with
Aged Care Queensland (ACQ) and the Retirement Villages Association (RVA) are harmonious if occasionally strained. Similarly we continue to meet regularly with the Department of Attorney-General & Justice, and the Office of Fair Trading (OFT) for development of policy and the presentation of major issues.
My sincere thanks to the outgoing committee, and I wish the incoming committee every success.
Warm regards,
Les Armstrong