SHARE PRICE PLUNGE FOR RETIREMENT VILLAGE OPERATOR AHEAD OF FOUR CORNERS INVESTIGATION
Written on the 26 June 2017 by Business News Australia
A RETIREMENT village operator which has been accused of charging excessive fees through complex contracts has responded to the allegations.
On the ASX this morning, Aveo Group (ASX: AOG) publicly answered a total of 29 questions it was asked by the ABC's Four Corners and Fairfax during the news organisations' joint investigation which will be aired tonight.
The joint investigation will reveal stories of financial loss experienced by some of the residents in Aveo retirement villages who are not given adequate support from "underfunded" consumer affairs bodies.
At the centre of the report, Four Corners speaks with residents and former residents and reveals the contracts they signed which include specific clauses relating to property sales and ongoing fees. These contracts have have been described by lawyers and consumer advocates as "complex" and "rapacious".
The news partnership also spoke to current and former residents as well as their children, lawyers, former Aveo staff and lobby groups to substantiate its evidence.
Four Corners and Fairfax journalists probed mainly into Aveo's contracting and property sales processes, as well as the overall treatment of residents at its aged care facilities.
Questions included why Aveo Group's exit fees, or "deferred management fees", varied between individual contracts and why formers residents were still being charged maintenance fees after they left the villages.
The journalists also inquired about Aveo's property valuation scheme, and why there have been reported cases where residents have been waiting years to sell properties which have been valued at less than the median market or purchase price.
In response to the 29 questions, Aveo says it is trying to simplify and standardise the contracts it has with residents, and that the exit fee on new contracts is 35 per cent of the purchase price if the resident leaves after three years.
"Aveo also conducts regular customer satisfaction surveys with its own villages to gather feedback and provide improvements to the service being provided to residents," Aveo CEO Geoff Grady says as part of the ASX statement.
Grady says the company's latest national survey shows that 89 per cent of residents feel safe and secure in their village, 87 per cent agreed that they are confident they will receive prompt emergency attention via the emergency button and more than 90 per cent believe staff to be respectful and willing to help.
Aveo owns and operates 89 retirement villages across Australia with a total of 11,014 units and more than 13,000 residents.
Its share price has dropped nearly nine per cent to $2.78 at around 1pm AEST.
Never miss a story: Sign up to Business News Australia's free news updates
Follow us on Twitter, Facebook, LinkedIn and Instagram
Author: Business News Australia