These changes have set new standards for the retirement living sector, giving consumers more confidence when choosing to downsize to a retirement village. They are expected to provide a benchmark for future legislative changes governing retirement village contracts in Australia.
Australia's leading owner, operator and manager of retirement communities, with over 12,000 residents living in 75 retirement villages, Aveo Group has responded to consumer demand for clearer, more transparent financial contracts.
The launch of "The Aveo Way" contract redefines the financial model for retirement community residents and their families, and offers protection for new residents moving into 44 Aveo villages around Australia. It offers upfront disclosure of all costs, change of mind assurance, and less exposure to the volatility of the real estate market by guaranteeing the sale of the residence with no sales commission or marketing costs.
The Aveo Way adopts a membership model approach and is designed to remove the financial risk and uncertainty when entering a retirement village. It was developed following a 2013 census of 5000 respondents from the retirement living sector, which concluded that new residents were not achieving a clear understanding of the contracts they enter when purchasing a property within a retirement village.
Alison Quinn, Executive General Manager of Retirement for Aveo Group said that Aveo drives continuous improvements and leads change in the retirement living sector to meet and exceed its residents' expectations.
"We have listened to our residents and are offering a solution to the market based on best practice modelling from around Australia and overseas," said Ms Quinn. "By taking the lead in changing the way the retirement village industry operates, we believe this will be beneficial for the entire industry and could have a fundamental impact on future legislative reviews."
A major concern uncovered by the 2013 census was related to the unpredictability and uncertainty of fees incurred during a resident’s time at a retirement village, even though many residents found the level of fees reasonable and only nine percent of retirees found the cost of living significantly more expensive than when living in their previous home. The Aveo Way contract has been created on a foundation of transparency and provides upfront clarity of all costs associated with living at an Aveo village when signing the contract, with no hidden fees or charges.
Aveo has also ensured that residents feel comfortable in their purchase with a range of assurances designed to allow for a change of mind. These include a 21 day cooling off period, without any penalty; a 90 day settling-in assurance; and a low deferred management fee that reduces the cost should a resident choose to leave.
To provide clarity of the costs associated with leaving a village, the Aveo Way contract has no sales commission or marketing costs; no reinstatement or refurbishment costs; and guaranteed sale of the residence after twelve months (six months in New South Wales and Tasmania as per existing state legislations), with Aveo absorbing any capital loss on the property.
The Aveo Way contract offers freedom of choice by allowing residents to change their accommodation type or village within the Aveo portfolio whilst recognising their current costs and conditions.
Aveo is also committed to providing home support and care services at all its villages, investing in allied health providers to ensure residents have access to all the services they require.