Contracts and ‘satisfaction’ with living in a village

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We need contracts, but they can be painful can’t they when working with residents.

Conversations with some village managers, combined with some research we have done with residents, prompted us to write this discussion piece. It might give you something to think about.

(The research was done in January 2017. Called the Villages.com.au National Resident Survey, with 19,600 residents across 520 villages filling in a 48 question survey. Your village may have been one).

The contract is the last step formalisation of the agreement between the incoming resident and the operator.

But does it represent what the operator offers and the customer accepts?

Physical, emotional or financial

Unlike most purchase transactions, buying into a retirement village is a very human transaction – it goes to the fundamentals of quality of life. Villages offer physical, emotional and financial security.

That is what we market and sell.

Are these embodied in the contract that binds the operator and the resident? The answer is ‘No’.

It’s a property contract

A retirement village contract is a property contract. The operator provides the resident a lease with a licence to occupy, or a loan agreement with a licence to occupy or a strata agreement with a management contract.

All contracts are developed under in each state.

Since 1978 the Retirement Village Act legislation and its regulations have evolved to protect both operators (owners of village properties) and residents (tenants in effect of village properties) in their contractual agreement providing physical accommodation (in ‘quiet enjoyment’).

It’s not easy legislating and regulating the human aspects of seniors living in a medium density community (often for the first time for the resident and with predictable declining frailty) – and it has not been generally achieved.

Not a ‘human’ contract

The result is complex property/tenancy legislation interpreted into contracts that ageing consumers do not understand – the language, the complexity or the basic purpose of the contract.

These contracts do not go to the ‘human contract’ between the resident and a village operator.

The concepts of ‘reasonable’ and ‘fair’ don’t fit in with the wording of the laws.

The contracts cover ‘all residents’ which may mean not favouring one resident over another or providing special treatment.

Not listened to, not respected

Individual residents then feel they are not being listened to (‘respected’).

Examples may be allowing a resident to make modifications to their unit when other residents are not permitted, or allowing a partner not named on the lease to remain a resident after the leaseholder has departed.

These restrictions, the management of the ‘human’ aspects of individuals in the village, is at the core of much of the dissatisfaction identified in our resident research.

 Drivers of discontent.

When residents have issues and they are responded to reasonably, fairly and promptly by the village manager, almost irrespectively of the outcome for or against the request, the satisfaction of the resident remains high.

When the issue is not responded to, the satisfaction plummets.

See the chart below measuring satisfaction out of 10.

 

 

The message is the aware of the property contract but don’t allow it to smother the human contract.

Chris

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