Why should there be regulations on retirement village contracts?
Signing up for a retirement village is more like purchasing an insurance contract, only there are not enough policies and regulations associated with it. Due to this very lack of regulations, the elderlies also go through a lot of inconveniences with regards to payment, especially when they leave. The common rule is that an agreement has it that a consumer is allowed to stay in the retirement village throughout his/her life and provided with an exit payment in case they decide to leave. However, more than often, the payments are either delayed by a considerable amount of time or totally absent in some cases. This happens because the retirement villages do not have the policies and financial standards like that of an insurance company.
To avoid problems regarding the payments, it is necessary that some changes be made to the retirement village contracts. Most retirement villages run just like small private companies, except they are non-profit organizations and need to produce their financial statements on a yearly basis. Despite this, a consumer cannot correctly judge the financial health of such facilities. Therefore, framing new policies and regulations would make it easier for the consumers to place their trust in such organizations.
What type of fee structure do retirement houses have?
The fee structure can vary considerably from one retirement house to another. There are three types of fees – the entry fees, the ongoing fees, and the departing fees. The retirement house fees are very high and comparable to the cost of buying a house. In some cases, the consumers are even required to make a separate fees and maintenance fees.
Why is there a need for proper regulations?
More than often, the assets held by retirement villages are in the form of real estate. This is the major drawback for such organization as there is no hard and fast rule that these can be converted into cash when needed. The properties may not get an immediate consumer and there could also be a loss in the value of the property upon resale. All of these can lead to a substantial delay in payments. Not only are that, in some cases, the residents even forced into payments for renovations so that the property can get a better value upon resale.
There is, in fact, a high need for amendment in the regulations as the consumers are already in a weaker position to make bargains after they have signed the contract. This is because, in doing so, they make the payments for their entire life to come. This is not like monthly rentals where you can come and go as you like. Having received the entire amount of money, the retirement villages have nothing to lose even if the consumers’ pleas are neglected. The process of getting out of these contracts can also weigh quite heavily on the consumers both from an emotional and financial point of view.
The only way to avoid the complexities at the time of exit is by having a clear policy in favor of the consumers. This puts the consumers at a lower risk so that they can have a soundness of mind, even during their time in the retirement villages.