Complaint numbers to Fair Trading and action taken to simply process

MR STEVENS ASKED THE MINISTER FOR TOURISM AND FAIR TRADING (MR LAWLOR)—

QUESTION:

With reference to the sale of retirement village units when vacated and the exit fees and financial impediments (loss of any capital gain on the property) involved when selling, including the exorbitant cost in partaking in the dispute resolution process—

(1) How many complaints has the Office of Fair Trading received and what action has been implemented to protect seniors and retirees in our community?

(2) What action is being taken to simplify the process to avoid expensive legal fees associated with the dispute resolution process?

ANSWER:

(1) Given that no time limit was requested in your question, figures have been provided for the period 1 January 2009 to the 31 December 2009. The Office of Fair Trading have received 20 complaints about retirement village matters. Of these, only one related to exit fees upon the sale of a property.

In 2006, amendments to the Act clarified that the exit fee must be calculated as at the day the resident leaves their unit, and not when the unit is eventually re-sold which could take weeks or months to happen.

In 2008, a Ministerial Working Party was formed to discuss a range of retirement village issues. One issue for consideration was whether the Act allowed the exit fee to be calculated on a ‘pro-rata’ basis. The outcomes of the working party have been considered, and may result in further amendments to the Act.

In addition to paying the exit fee, a resident is also liable to continue paying the general services charges over the unit until it is sold. This could sometimes be an onerous requirement where a sale takes some time. To address this, the 2006 amendments introduced a nine-month cap on the time a resident is responsible for these charges. Where the unit remains unsold after this period, the operator becomes responsible for the charges.

Some residence contracts allow the resident and the operator to share capital gain on sale of the unit, but this is a matter for the parties to negotiate.

(2) Where there is a dispute between a resident and the scheme operator over their rights and obligations under the Act or their individual residence contract, the dispute resolution process provided by the Act apply.

This provides an informal and inexpensive mechanism for resolving disputes. The process has three steps - an initial informal discussion between the parties, followed by mediation if discussion fails to resolve the dispute, and finally a hearing before the tribunal if mediation also proves unsuccessful. Hearings are now before the Queensland Civil and Administrative Tribunal (QCAT). Hearings are informal and non-legalistic, and lawyers are not allowed unless special leave is granted.

In 2006, amendments were made to the Act to allow residents to take a group action to the tribunal, where a number of residents have the same dispute with the scheme operator. Other amendments allowed a family member of a resident to represent a resident, where that resident was too frail to represent themselves.

As an alternative to the dispute resolution process under the Act, residents may wish to take their own private legal action against the scheme operator. The Department of Communities operates the Seniors Legal and Support Service Centre to assist older persons in a range of legal areas, including cases of unfair and fraudulent practices in retirement villages. The Brisbane office of the Seniors Legal and Support Service Centre may be contacted by telephoning (07) 3254 1811 or via its website at www.communityservices.qld.gov.au.

The Association of Residents of Queensland Retirement Villages also represents the interests of village residents in negotiations with the industry and all levels of government. The Association can be contacted on telephone number (07) 5493 7112 to answer questions from residents and prospective residents about most facets of village life. Information on the Association can be obtained from its website at www.villagers.org.au.