Another class action to target retirement village rip-offs

A second legal firm is calling on former residents of Aveo retirement villages to join a class action.

Maurice Blackburn Lawyers is seeking former Aveo retirement housing residents who paid departure fees from 2013 onwards.

The class action, which would be conducted on a no-win, no-fee basis, follows a joint Fairfax Media/ABC Four Corners investigation in June that revealed questionable business practices by the Aveo Group.

These included exorbitant exit fees (also called deferred management fees by Aveo). Maurice Blackburn said those fees were typically 20 to 40 per cent of the entry fees paid for the unit.

In addition to the exit fee, other terms alleged to be ‘unfair and unconscionable’ included:

  • Capital gain/loss terms that entitle Aveo to 50 per cent of any capital gain but the resident bears 100 per cent responsibility for any capital loss;
  • Expensive maintenance fees that continue after the unit has been vacated; and
  • Terms that make it the resident’s responsibility for the costs of finding a new resident.

The contracts have further been alleged to be unnecessarily complex and confusing. 

The announcement follows a Victorian Government inquiry into problems in the retirement housing sector, an investigation by the ACCC, and an initial investigation into a class action by Levitt Robinson Solicitors in June.

National Seniors Chief Advocate Ian Henschke said uniform laws were needed to protect vulnerable seniors from exploitation. At present laws governing retirement villages are state-based.

Mr Henschke also called for a simple, standard, fair and universal contract Australia-wide and a national commissioner to oversee any complaints.

Affected people can register for the potential Maurice Blackburn class action at this website.

For more information, call Maurice Blackburn on 1800 572 149, or email Aveo@mauriceblackburn.com.au.

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