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Contracts and ‘satisfaction’ with living in a village

We need contracts, but they can be painful can’t they when working with residents.

Conversations with some village managers, combined with some research we have done with residents, prompted us to write this discussion piece. It might give you something to think about.

(The research was done in January 2017. Called the National Resident Survey, with 19,600 residents across 520 villages filling in a 48 question survey. Your village may have been one).

The contract is the last step formalisation of the agreement between the incoming resident and the operator.

But does it represent what the operator offers and the customer accepts?

Physical, emotional or financial

Unlike most purchase transactions, buying into a retirement village is a very human transaction – it goes to the fundamentals of quality of life. Villages offer physical, emotional and financial security.

That is what we market and sell.

Are these embodied in the contract that binds the operator and the resident? The answer is ‘No’.

It’s a property contract

A retirement village contract is a property contract. The operator provides the resident a lease with a licence to occupy, or a loan agreement with a licence to occupy or a strata agreement with a management contract.

All contracts are developed under in each state.

Since 1978 the Retirement Village Act legislation and its regulations have evolved to protect both operators (owners of village properties) and residents (tenants in effect of village properties) in their contractual agreement providing physical accommodation (in ‘quiet enjoyment’).

It’s not easy legislating and regulating the human aspects of seniors living in a medium density community (often for the first time for the resident and with predictable declining frailty) – and it has not been generally achieved.

Not a ‘human’ contract

The result is complex property/tenancy legislation interpreted into contracts that ageing consumers do not understand – the language, the complexity or the basic purpose of the contract.

These contracts do not go to the ‘human contract’ between the resident and a village operator.

The concepts of ‘reasonable’ and ‘fair’ don’t fit in with the wording of the laws.

The contracts cover ‘all residents’ which may mean not favouring one resident over another or providing special treatment.

Not listened to, not respected

Individual residents then feel they are not being listened to (‘respected’).

Examples may be allowing a resident to make modifications to their unit when other residents are not permitted, or allowing a partner not named on the lease to remain a resident after the leaseholder has departed.

These restrictions, the management of the ‘human’ aspects of individuals in the village, is at the core of much of the dissatisfaction identified in our resident research.

Drivers of discontent.

When residents have issues and they are responded to reasonably, fairly and promptly by the village manager, almost irrespectively of the outcome for or against the request, the satisfaction of the resident remains high.

When the issue is not responded to, the satisfaction plummets.

See the chart below measuring satisfaction out of 10.

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What is the DMF for anyway?

Did you know that in WA operators are required to describe exactly what they propose to do with the DMF cash?

What is the DMF for in your organisation?

Often when I dig into this with operators there are some great stories to be told.

The funding of social welfare programs, the development of homeless housing, additional funds to provide services for a nursing home, reinvestment into the village asset, social programs within the village, the list goes on and on….

It is not only great to understand what it is used for but also how this might benefit the residents.

Ie. Investment in the maintenance of the village brand will surely go towards assisting the village to obtain reasonable sale periods, build the funnel of people looking to move in the future, ensure the village brand is recognised as a trusted brand by friends and family within the local area.

If you don’t know the answer to this question I encourage you to have this conversation with your manager.

You will benefit, your sales people can explain to new enquirers and the village team will be able to articulate the many wonderful things that are often done with this profit when they are questioned in a work and social environment.

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Earle Haven Retirement Village – what is the story?

You have most probably seen the TV news reports on the crisis shutdown of the Earle Haven Retirement Village, with approximately 70 residents ‘abandoned by the operator’.

The important facts are these.

Earle Haven Retirement Village is a co-located property, meaning it is a big retirement village (approximately 500 homes) and a separate aged care home with approximately 70 residents.

It is located at Nerang, 12 km inland from Surfers Paradise.

The same name is used for both the village and the aged care home – Earle Haven Retirement Village.

Even the government website my aged care calls the aged care home the Earle Haven Retirement Village.

Both the village and the aged care home are owned by a company called People Care, which is owned by Arthur Miller. People Care is the operator of the retirement village.

Approximately 18 months ago People Care outsourced the operations of the aged care home to a company called Help Street.

Last Thursday at 2 PM one of the staff of the aged care home rang ‘000’ to say that Help Street had (allegedly) abandoned the 70 residents and most of the staff had walked out of the building.

Police and ambulances arrived to find the residents unattended and that the aged care home had been stripped of equipment, medicines, essential products like incontinence pads, food and more.

It took paramedics and doctors from Queensland health until 2 AM Friday morning to relocate all 70 residents at other aged care homes and hospitals.

The most damning element was the alleged removal of resident’s records – meaning the new carers did not know medications, medical histories or doctors.

And this is where the details become murky.

Nobody has yet identified clearly in the media who made the decision to abandon the residents and who stripped the home.

People Care state that they had given notice to Help Street that their contract was terminated, effective next month (August).

Help Street state that they had not been paid by People Care.

Everybody is being very careful in what they say because of the definite legal actions that are going to flow thick and fast, including lawsuits.

Importantly for us in the retirement village sector, there are implications.

The first is that across the country for at least 48 hours the media was reporting that residents of a retirement village were abandoned. Most have now been modified their wording to say the Earle Haven Nursing Home.

The second implication was that the actual retirement village was in financial difficulty, with stories that a resident had paid over $300,000 to enter in the 48 hours beforehand; this was ‘lost’.

It later came out this was a RAD payment to join the aged care home – not to enter the retirement village.

The third implication is perhaps the most serious. This is a story about two operators arguing over money, with no apparent regard for the residents under their care.

At a time when regulators are considering various arguments on whether residents of retirement villages are fairly treated financially – best demonstrated by buybacks – this story does not present well.

It attacks ‘trust’ in retirement villages and operators.

We can be assured that the story won’t go away either, as the truth slowly unfolds.

And now this event is being pushed to the Royal commission into Aged Care, with the possibility that retirement villages will be added to the scope of the Royal Commission – something the sector was pleased to have avoided.

On Tuesday, five days after the event, People Care held a meeting of village residents and their families, reassuring them that the village and their homes was financially secure.

By our next edition of The Village Manager we should know a lot more. Hope this article helps.

Key things to help you everyday

Important Regional Meet – next Thurs 8AM, Adelaide

Meet Vanessa Clarke, Chief Retirement Villages Officer, Dept of Health

Hear from our guest speaker Vanessa Clarke, SA’s Chief Retirement Villages Officer (Office of Ageing Well) who will talk about Code of Conduct & Terminations. 

This is an opportunity to network with other Village Managers in your area. 

Of course, there will be time to share an issue you may have in your village and hear if others with the same experience can help resolve it.

We are meeting at Brighton Dunes village at 8 AM next Thursday 25 July.

To attend simply register and the Regional Meeting hub section of the DCM Institute website HERE.

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85-year-old female village resident discovers ‘new love’ in Africa – do you understand the ‘Dignity of Risk’ responsibilities?

What would you do in this situation? One of your residents, an 85-year-old single woman who you believe is of sound mind, discovers ‘new love’ online with a 21-year-old African man (in Africa).

She decides she is going to fly over to Africa and you know that she has access to over $100,000 in her bank account.

What is your responsibility? Do you ‘let her go’?

I attended the Mornington Peninsula Regional Meet of Village Managers last week (40+ Village Managers were there), and one ‘Street Talk’ item that was raised was understanding the concept of Dignity of Risk and responsibilities.

This 85-year-old woman was a real life example given by one Village Manager – and the new laws and regulations mean that the village management cannot interfere. This is the principle of ‘dignity of risk’ – meaning, no matter what our age, if we want to engage in risky endeavours then it is our right to do so unimpeded.

So the 85-year-old did fly to Africa – and she has never been seen or heard of again. (We did not learn about what happened to the money!)

What is the law

What is the responsibility of the Village Manager and Operator?

A whole range of different laws and regulations have emerged in the last couple of years, under state regulations, the Human Rights Commission and even in the aged care space with this week’s new Aged Care Quality Standards. This picture below summarises these new ‘rules’ (including home care).

If you are in a challenging position, uncertain on how to guide a resident, our advice would be to organise legal advice, because this is going to be a ‘grey’ area!

P.S. Africa happens a lot – watch this unrelated telecast.


Things to watch

Do you need a ‘contract ready reckoner’? Most probably ‘yes’

Picture this: you are the Village Manager with 80 homes and 120 residents. Each of them has a vague or real idea of their individual contract terms, and they think that you do too.

But chances are that, at best, you only have a vague idea – not a great place to be when conversations start.

In fact, for most villages that are older than 10 years, it would be very normal to have multiple versions of resident contracts in place.

Versions change because of changes in regulations but also because owners and salespeople change the ‘sales offer’ in difficult times to entice a new resident into the village, plus many other reasons.

And over the past 15 years (since before the GFC) many villages have had multiple operators with each HO introducing various changes to resident contracts.

Build some vision of your village with a contract ready reckoner

In my experience, it is great to be able to look out the office window and think “I have a good idea of all the contracts out there in the village I have to work with”.

To assist with your decision-making and compliance, it is a great idea to develop what I call a Contract Ready Reckoner. 

It is a simple document that identifies the various differing contract clauses that may be in place in the village. This document would likely include

  • A description of how you identify the contract type (could be year range, operator name, pre-stage 2, etc.)
  • Maintenance fee inclusions
  • Exit fee
  • Refurbishment charges
  • Remarketing fees
  • Administration fee
  • Valuation requirement
  • Refund payment/buy back timeframe

It can be a simple Word document or an Excel spreadsheet with each of these items as a column and a tick box.

It will become a handy tool for planning, budgeting, response to complaints, terminations and much more.

Invest the time – one hour a week

It does take a bit of time to assemble; you might want to allocate one hour a week, say on Friday, to just review five contracts. I suggest you start with the oldest. This process will take about six months, but you will be surprised and fascinated with what you find.

And it will give you a great sense of confidence when talking to your residents.

Please remember, regardless of these facts and descriptions in the contract, the Retirement Village Act will override any clause if it is for the betterment of the resident.


Key things to help you everyday

Are we Community Managers or Facility Managers, and which is more satisfying?

Travelling around the country delivering the Village Manager Professional Development Program, I was asked by a program participant an interesting question that I didn’t have the total answer for.

You see she was relatively new into her role (around 9 months) and she described to me that she had been employed as the Community Manager.

She shared what excited her most about the role was the chance to give back, to make a difference, to facilitate information or activities to provide choices to residents to live “their best life”.

And her job description also had resident welfare and the building of community, but also the typical variety of responsibilities – from managing budgets to maintaining assets. 

Where is the time for ‘community’?

Yet now she has been in the role some months she is finding that she rarely has time to focus on these very aspects of community building that excited her so much. 

She feels she has become a Facility Manager. She asked me: how do I find time for the residents?

I guess there are two aspects to this in my experience.

The first is that even by coordinating the maintenance, garden, budgeting and cleaning etc, she is still actively contributing to the service provision for residents that was promised to them.

However, secondly, it is up to her to prioritise these functions to create time for community building.

Start small

My advice is to start small. Remember, an ‘event’ only requires two people – that is two people achieving enjoyment out of interacting with each other (including you – who is equally important).

I recommended:

  • Make a list of the easy things that you can do that are ‘building blocks’ to creating and maintaining community
  • Place the easier ones that take the least time at the top
  • Check the activities calendar for holes or things that are already being addressed
  • Check if there are any obvious volunteers in the village that you can rely on

Now allocate even just one hour a week to your list – and I have found it is good to alternate the activities. Here are some suggestions:

  • Conduct two resident check-in discussions
  • Visiting a resident that may have experienced a life changing incident recently
  • Attend a resident function
  • Research and communicate activities occurring in the local community
  • Plan a social event or activity
  • Organise a guest speaker of interest

I guess the message is that, just like allocating time to the compliance and service provision role of being a Village Manager, we need to make a conscious effort to allocate specific time to the building of ‘community’.

This is time allocated for us – making sure we get fulfilment out of our role; because it is a 100% certainty that the village residents will greatly benefit from our positive enthusiasm to contribute to their ‘community’.

After all, we are not facility managers – we are community builders.