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 Villages.com.au 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.

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.

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.