In this tale, I will refer to my mother as O. She moved into Village A.

I will call my mother-in-law N and my father-in- law T. They moved into Village B.

In 1987 O moved into a retirement village, my father having died two years before. She lived there until 1994, when she broke a hip at a time she had begun to dement, and she lived in a nursing home until she died in 1998. The village was close to her previous home, a big advantage in that she could still go to church and maintain contact with longstanding friends and neighbours.

In the 1990s N and T were living on the Central Coast; my husband went up each week from Sydney to visit them. It became apparent that N was becoming more difficult, dementing, and not receiving proper medical care. T had a weak heart and was trying to cope without local assistance.

After T had an episode in hospital with heart failure, the need for them to live closer to us became obvious. It took some time to persuade N, but eventually they moved to a retirement village close to us. N died rather unexpectedly a year later after a couple of days in a nursing home attached to the village; T lived there until the end of 2004, when he had to leave because he was incontinent and barely mobile. Thenceforth he lived in a nursing home until he died in early 2007.

Similarities between the two villages – and significant differences

To describe the similarities first:

1. The two villages were similar in layout and in the standard of amenity provided. Both were in a pleasant location – Village A in a beautiful leafy suburb, Village B in a suburb close to the sea, beside a tree- and bush-lined creek where whip-birds cracked their musical note throughout the day.

2. Both were built in the early 1980s and were modest by comparison with expensive retirement ‘villages’ built more recently. They were of plain brick, small units for a couple or a single person containing a bedroom, sitting room, small bathroom, kitchenette and tiny balcony. Each village had a large central dining-room with an area for other leisure activities. Each owned a small bus and arranged regular and frequent outings for residents. Each provided adequate meals (though grumbling about food seems be an endemic feature of any institutional arrangement). Both predominantly offered hostel accommodation, with residents able to eat all their meals in a large central dining room, although Village A also had some larger ‘self-care’ units.

3. T and O, while they may have been reluctant at first, each enjoyed living in their respective village. Both sociable, they were liked by other residents, participated in and contributed to social activities, and generally I truly believe they were much better off there than they would have been had they stayed in their own homes. N was never reconciled to being moved.

4. We have no criticism to make of the way our parents were cared for by the staff of each village; the way their medications were supervised and administered; and the ease of our communication with and from operators of each village.

These are the significant differences:

Village A

1. a) Village A was owned, administered and operated by a Protestant church. The village was built on part of grounds also occupied by a lovely old stone church. My parents had been devoted parishioners of the local Catholic church, which owned a great deal of land in the suburb, and there was other extensive Catholic church property in the suburb as well. Despite much effort by parishioners over many years, and regardless of the enormous loyalty and support of the local congregation, no Catholic retirement village was ever built there, although considerable church property was sold off over time. So she moved into a mainly non-Catholic village, but this never worried her and she was very well liked by other residents, even those with ‘anti-Catholic’ prejudices.
   
   b) O did not have ownership of her unit, but had the security of living there until she died, chose to leave or was unable to stay because of infirmity. She paid $33,000 for the entitlement to move in.
   
   c) O paid a monthly fee for the services she received from the operator. That was her only payment in respect of her occupation of the unit as far as I remember (I cannot recall whether she paid electricity or other fuel or water costs).
   
   d) After she left the Village, O received back $31,000 from the operators. This was her original $33,000, minus a $2000 deposit. This effectively ended the family’s relationship with Village A.

Village B

1. a) For N and T, our first preference was for a similar church or not-for-profit village. Any of those proximate to us had such long waiting lists they were closed, or had restricted entry for certain categories of residents, and N and T were not eligible. There was no choice but to look elsewhere. In any case, the decision was theirs. They felt most comfortable with the one that was finally chosen. We were told it was one of a number owned or run by a well-known nursing home operator.
   
   b) Village B was a strata scheme. This means that N and T had to buy their small unit, as one would buy an apartment anywhere.

T had worked all his life at a low-paying job; thanks to N’s good management they had been able to buy a small home on the central coast. This they sold in order to pay the asking price of about $140,000 for the unit in Village B. Retirement units seemed to be selling well at that stage - we had to wait a little while for a unit in Village B to become vacant; so there seemed little doubt that the unit would hold its value when the time came for it to be re-sold.

We were handling the business associated with these property transactions. We gave a local solicitor the contract for sale of the property to check, and he merely noted that ‘all these contracts are much the same’ when he approved N and T’s signing of it. An extra payment (a departure fee) was to be made to the operator of the Village after the owners departed; this, too, was apparently standard practice for this type of Village. Since the amount was related to the time in which N and T occupied the unit and this could not be foreseen, it could not be calculated in advance. Besides, the need to relocate them was urgent and we had little choice but to proceed.

• N and T paid a fee for the services they received from the operator, similar to that paid by O. They also paid rates to the local council, and a quarterly strata levy, as well as gas, water and electricity bills.

d) When T left Village B at the end of 2004 it was apparent that he would not return. We therefore put the unit on the market. But time went on and we received no expressions of interest in the unit, let alone an approach from any potential buyer.

While looking for a nursing home for T we had visited quite a few nursing homes with retirement villages attached. It seemed to us that they often had a large number of vacant retirement village units for sale. I therefore formed a view that the market for such units had softened considerably, that they had gone ‘out of fashion’ in some way. The operator of Village B suggested that people these days leave it until almost too late to come into retirement villages – that is, they are almost ready for nursing homes; and T’s unit was not favoured because people had to walk a little extra distance to the lift down to the dining-room.

We accepted this for a while, but became impatient as the bills kept coming in and nothing was happening. The rates on this tiny unit – the ‘minimum rate’ in an expensive beachside suburb - were higher than we pay for a modern 3-bedroom apartment in the inner city. The quarterly strata levy kept coming, and, increasingly, special levies. We decided it was time to look more closely at what was happening at Village B.

What we found shocked and scared us. There had been subsidence in one part of a two-storey Village building, leading to cracking in two of the residential units. A large special levy was needed to rectify the problem. Another special levy was required for legal costs after the owner of one of the units threatened to sue the Owners Executive Corporation.

Thus, belatedly, we focused our attention on the governance of the Village. An Owners Corporation was responsible for making decisions about maintenance and management of the building. We had assumed, without thinking much about it, that the Operators, who presumably were making a profit running the Village, had some sort of overall responsibility. The similarities between Village B and Village A had misled us. When O had moved in two-thirds of retirement villages were owned by churches or not-for-profit organizations, so the way Village A operated was assumed to be the norm.

But NO: the owners – these elderly people, who had come to live in a Retirement Village of the hostel type precisely because they no longer wanted the responsibility, or were no longer capable, of maintaining their homes - had been given the task of managing something much larger and more complicated than a family home. When T once went to an Annual General Meeting he was prodded by the Manager ‘put up your hand, T’ when they were trying to elect an Executive Committee. T was duly ‘elected’. He was almost blind (and couldn’t read very well anyway); and almost totally deaf. With others of similar capacity on the EC, ‘decision-making’ would have been a farce.

We met other ‘beneficiary owners’ (that is, relatives ‘stuck’ with unsellable property after the owners died) recently, when we arrived for the AGM only to find that it had been postponed. One of the beneficiary owners became chairman of the EC at the last AGM because of concerns very similar to ours. Others we met spoke of the Strata Management in very negative terms. Without having gone back through all the minutes of meetings, it is hard to know how much the S/M has become the scapegoat, or whether they have been incompetent or dishonest. Certainly, there appears to have been no sinking fund to cover refurbishment expenses, let alone substantial repairs.

Things got worse and worse as we looked more deeply. Last time my partner visited, a courtyard had been excavated, as more subsidence had been detected. It seemed that concrete had been improperly poured over the main drainage and sewerage pipes during the original building of the property, and seepage was going goodness knows where. While it seemed that a good case could be made for compensation from the builder, records have ‘gone missing’, it was built over 25 years ago, and the costs and uncertainty of recovery have to be weighed up.

Worrying questions are prompted by one sentence in the contract: The land on which the Village is located is owned by [a major corporate healthcare provider].

How could we be strata owners and not own the land? The Contract N and T signed is headed Contract for the sale of land. The property is defined in the contract as ‘The land, the improvements, all fixtures and the inclusions, but not the exclusions’. Every lawyer we have consulted says it doesn’t make sense.

Still, that troubling sentence lurks and time will tell what it means.

At around the time the courtyard was dug up, the Operator put a large advertisement in the local paper, noting that units were available from as little as $50,000 – a third of what T and N had paid. But as far as I know there were no takers – not after they’d been to see the excavations in the complex, or glanced at the strata records.

As I write, we are waiting to hear the date of the postponed AGM. It was meant to be held in early December, but was postponed ‘till late January’. It is now 14 February, and there has been no notice of the adjourned date. Yet another special levy is proposed.

What way out of this (literal) morass? And what issues arise from this tale of two Retirement Villages?

Here are the key issues as I see them:

• In their eagerness to reduce the costs of aged care by welcoming private operators into the retirement village and nursing home market, governments have abandoned the vulnerable elderly to the market – that is, to the law of the jungle – without putting proper safeguards in place.

• People enter retirement villages with an expectation that traditional principles of aged care still apply. What they do not realize is that corporations ensure that all risk in the enterprise is transferred onto their shoulders, and all profits go to the operators.

As more and more residents in retirement villages – or, more likely, their unfortunate ‘beneficiary’ family members – find themselves in the kind of intractable situation that I have described, what will happen?

My father-in-law was a simple working man, very proud that he had been able to acquire real estate to hand down to his only son. I am glad he is not alive to see that his legacy has become a burden.

What can be done?

1. Interested groups and individuals seek feedback from those associated with strata retirement villages to see if the kind of trap outlined here is being widely experienced. As more and more retirement villages become due for refurbishment, I predict that it might become increasingly common. For all I know, it may be common already.

2. Pressure should be placed on the government to provide more protection for strata village residents. I recommend that:
   
   (a) An agency, office or commission be set up by the State Government to oversee strata retirement villages.
   
   (b) Officers of this Agency be ex-officio members of each village’s Owners Corporation and Owners Executive Committee.
   
   (c) Officers of this Agency be available to:
   - attend AGMs of stratas if this seems warranted,
   - provide advice and information to resident committee members,
   
   (d) Officers of this Agency receive minutes of all meetings and mandated access to any documents relating to stratas that might be deemed necessary in any particular situation.

This would be a legislative reform that I think would help. If many ‘beneficiaries’, ageing themselves, are stuck with unsellable properties that continue to drain their funds, is there a possibility of some sort of class action? Against whom?

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