The State Government has made amendments to the Retirement Villages Act 1986 making it easier for residents to recover money owed to them if the village goes bankrupt or becomes insolvent.
The changes remove the need for residents to launch legal action against village owners before the Supreme Court can make an order that the land of the village be sold and the revenue be used to pay former residents owed money.
The changes will also enable the Director of Consumer Affairs Victoria to apply to the Supreme Court on behalf of affected village residents and their estates when it is in the public interest to do so – rather than requiring them to take expensive court action on their own.
In addition, the Court will be allowed to make orders to assist with recovering money if it is in the interest of the majority of residents, instead of all residents.
The amendments are designed to avoid situations such as the one that occurred with the Berkeley Living Retirement Village, where former residents have been battling to be repaid their refundable in-going contributions after the village went into liquidation in 2017.
As we reported at the time, residents ‘purchased’ leases for around $100,000 at the village but it’s alleged on 30 occasions residents weren’t granted a refund when they left the community.
After the media attention, the Health Department and Consumer Affairs Victoria visited the site and hit the owners with $500,000 of repairs and fined, including for fire safety regulations.
Consumer Affairs were also forced to relocate 16 old and frail residents when it was announced the village would be closing.