In September 2017, Levitt Robinson filed a Class Action in the Federal Court of Australia against the retirement village operator, Aveo Group Limited.
The action relates to the management contracts (also known as “service agreements” or “residence contracts”) being given to residents, and has been brought on behalf of current and former residents of Aveo-run villages who purchased their units before the “Aveo Way” was introduced (including people who have sold their units, or if they have died, their executors).
Levitt Robinson’s Senior Partner, Stewart Levitt, was interviewed about the Aveo problem by Fairfax journalist, Adele Ferguson on the ABC Four Corners program on 26 June 2017 and for the “Retirement Racket” series of articles in the Fairfax newspapers, which were published in the lead-up to the Four Corners episode. Levitt Robinson introduced the journalists to the plight of residents.
Levitt Robinson believes that many Aveo residents may have been “sold a lemon” and we are now trying to do something about it. As Mr Levitt told Ms Ferguson on the ABC:
“Let’s face it, historically, exploitation has always reigned until there was concerted reaction against it.”
What is the Class Action about?
In late 2014 or early 2015, Aveo launched its new “Aveo Way” contract and began rolling it out across all of its retirement villages in Australia. The Aveo Way was formally launched only in May 2015.
The Aveo Way Contract contains terms which significantly depart from the previous management contracts in Aveo retirement villages. The key differences include:
- an acceleration of the exit fee/deferred management fee, crystallising as a liability after just three(3) years, to a maximum of 35%, plus an additional “Aveo Membership Fee” component of $1,500 a year;
- Aveo keeping all of the capital gain realised on the resale of the unit;
- the Aveo Way tenant, risking responsibility for 50% of any capital loss; and
- in many villages, a change from freehold tenure to 99-year leasehold tenure, with “99 years” being just a chimera.
In the Class Action, we allege that these changes in the management agreements offered by Aveo depress the resale value of the units in Aveo retirement villages. Levitt Robinson is seeking compensation for everyone (or their executors) who has sold a unit in an Aveo retirement village since the introduction of the Aveo Way contract, representing the difference in value between the amount they received on resale and the amount that they should have received.
The Class Action also seeks the return of sales commission that Aveo has been charging residents for the sale of their units in Aveo retirement villages, when the purchaser was the manager of the village.
For existing residents, the Class Action seeks a declaration that the Aveo Way Scheme is unlawful and an injunction restraining Aveo from selling units in Aveo retirement villages in accordance with the scheme unless it makes full disclosure of the impact that this would have. If granted, owners will achieve a real and measurable financial benefit.
Do I qualify to participate in the Class Action?
You are a group member in the Class Action if:
- you are a current resident in an Aveo retirement village into which the Aveo Way contract has been introduced; or
- you are a former resident in an Aveo retirement village, or an executor of a former resident’s deceased estate, and you sold your unit in that village in accordance with the “Aveo Way” contract.
At present, the Class Action only relates to people who have or who have had freehold title in their units. A claim on behalf of owners with “99 -year”leases is being prepared.
How can I register for the Class Action?
For more information, please:
- fill out the below registration form,
- email firstname.lastname@example.org, or
- call 02 9286 3133 and say that you are calling about the Aveo Class Action.
If you are interested in joining the Class Action, please send a copy of your management contract, residence contract, or service agreement to:
- email@example.com, or
- Levitt Robinson Aveo Class Action, PO Box 850 Darlinghurst NSW 1300.
Aveo Group Class Action Registration Form