Investigation finds retirement village exit fees are too high for some retirees

ABC NEWS (Australia)

More than 250,000 people currently live in retirement villages in Australia. While the sector is marketed as safe, fun and low maintenance, some retirees are hit with exorbitant fees when they attempt to leave.

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00:00The exorbitant fees and oppressive clauses in contracts, so when people go in, they're

00:10affordable, but when they leave, that's when they get stung with exit fees that can be

00:14up to 60% of the sale of the property, and refurbishment costs, so people such as, we

00:21spoke to many families, and you might want to hear from some of them now.

00:27I can't believe my mother's lost all her life savings.

00:30I felt sick, I had to read through it more than once, I got my husband to read through

00:35it, I emailed it to my brother and said, can this possibly be right?

00:39You get people who go in, pay $400,000 and can end up with $81,000, which is not enough

00:47to go into aged care, so they have to go on a waiting list.

00:50It's state-based regulation, so it slips through the cracks.

00:53There is a voluntary code of conduct, which only 40% of the industry have signed up to,

01:00and there are no penalties if they breach.

01:03What's been the response from the sector itself?

01:06The sector says the contracts are clearly laid out, they advise that residents or prospective

01:13residents should go and see a lawyer or a financial planner, but some of the contracts

01:18we've seen, they're algebraic formulas, so I think it would take a very clever lawyer

01:24to understand some of these contracts.

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