Retirement villages are billed as worry-free independence for Australians but many have few options once they move in

No pets without permission, no smoking in your own home, no visitors for more than a month and no garden decorations without consent.

Mandatory medical examinations and big but hard-to-understand financial consequences.

Welcome to life inside some of Australia's retirement villages, which hawk themselves as offering residents a worry-free life of independence, low maintenance and security.

But dozens of resident contracts examined by the ABC reveal a pattern of tight control — some even demand approval for every pet except fish in a tank.

Some include a long list of costs for everything from insuring the workers who trim the hedges, to exit fees and compulsory renovations of your villa when you leave.

The contracts, which can run to 149 pages, also govern how fees that are charged when a resident leaves a village are calculated.

When they leave, residents are usually entitled to a refund of what they paid to get in — minus what is called a "deferred management fee", plus a list of other charges including the cost of renovating the property.

Some current and former residents and their families describe these fees as a financial trap.

A world of complex contracts

One contract seen by the ABC includes a complex mathematical formula to work out the exit fee that is based on seven different variables.

It was signed in 2020 by Helen McPhee, who according to her doctor was suffering from cognitive decline at the time.

"About page two or three into the contract, there was this algebraic formula that … meant that she was losing 35 per cent as an exit fee," Ms McPhee's brother, Michael Macnamara said.

Ms McPhee has lost about $130,000 out of the $365,000 she paid to enter the Torrens Grove village in Adelaide, leaving her with $235,000 — a sum Mr Macnamara says meant she didn't have enough money to fund going into the aged care she now needs.

Village operator RetireAustralia is a signatory to a voluntary industry code, overseen by the powerful Property Council's Retirement Living Council, that says contracts should be written in "plain English".

The code was introduced in 2020 but less than half of the sector has signed up to it and administrators haven't recorded a single breach by code members in the four-and-a-half years it's been in force.

Confronted with the formula in Ms McPhee's contract, Retirement Living Council executive director Daniel Gannon said it was "quite a complex component" but said his organisation recommended would-be residents should always get independent legal and financial advice.

"Lawyers absolutely will understand contracts," Mr Gannon said.

Mr Macnamara described the contract as "morally abhorrent".

"She's had to go into an aged care system that costs nearly $500,000 just to get into a not-for-profit," he said.

In a statement, RetireAustralia admitted the equation "may be complex for some" and was "granular in detail" but said it was the first time the issue had been raised with the company.

"We apologise that our explanation of the Deferred Management Fee (DMF) has not met the expectations of Helen McPhee's family," it said.

The company said the $365,000 Ms McPhee paid to get into the village in 2020 was "more than 30 per cent less than the local median house price of $531,500".

"The DMF in our standard contract is the only fee that allows us to reinvest back into villages through capital replacement works, ongoing maintenance of communal facilities, and village upgrades. It also covers the refurbishment, sales and marketing costs of homes and the remainder is profit."

It said it was first told of her cognitive decline in June 2022 and at the time she bought the villa in 2020 "she drove herself, was articulate and asked considered questions about the purchase and process".

Retirees left massively out of pocket

Last financial year RetireAustralia, the owners of Torrens Grove, made a profit of $43.1m from its 29 villages on the eastern seaboard and in South Australia for its owners, ASX-listed company Infratil and the New Zealand Superannuation Fund.

Mr Gannon told the ABC that buying a two-bedroom retirement villa was on average 43 per cent cheaper than buying a home in the same postcode.

But this figure doesn't take into account the cost on the way out. And, for 10 of the contracts the ABC examined, it was possible to compare the payout the resident received or is likely to receive from selling their village unit with the return from investing in buying a home in the same area.

To do this, the amount received back at the end of the contract was compared with figures from property data company CoreLogic showing the growth in home prices in the same area over the same time period.

All 10 examples showed the retirement village resident went backwards financially after various fees were deducted, while real estate came out ahead.

In Colleen Green's case, her mother, a resident in the Tranquil Waters village at Victoria Point in Queensland, was told she would lose 79 per cent, or more than $300,000 out of the almost $384,000 she tipped into her villa in 2013.

Over the same period, data from CoreLogic shows homes in the same area doubled in value.

'Don't understand what they're signing up for'

Tim Kyng, an actuary and retired academic, built a retirement village calculator with Macquarie University to help retirees and their families compare different contracts and give them a better understanding of the true cost of living in a retirement village.

He has looked at hundreds of contracts and found in most cases, retirees leave with less than they went in with.

He has used his skills as an actuary to work out the equivalent in rent paid during the resident's stay, taking into account factors including the cost of the home, all the fees charged, the resale price and the age and gender of the resident.

For the Greens, Dr Kyng's calculation works out to her paying the equivalent of about $3,600 a month. Real estate listings show this is about $1,360 a month more than renting a nearby three-bedroom home in the same postcode and only $320 a month less than a five-bedroom luxury house, complete with pool and spa.

Tranquil Waters did not respond to questions put to them by 7.30.

At Living Choice's retirement village at Twin Waters, on the Sunshine Coast, the contract Lynette Anderson's mother, Ruth Law, signed in 2015 included a clause telling her that "except for fish in a tank, you may not have pets in the village without our consent".

The contract said that when it came to the possibility of other pets, "we may give or refuse this consent at our absolute discretion".

Ms Law is currently trying to sell the unit. She's set to get just $258,000 from the $564,000 price she paid to enter the village, which is equivalent to a loss of 54 per cent.

CoreLogic data shows that if she had bought real estate in the same suburb, it would have increased in value by 92 per cent over the same period of time.

In the meantime, she continues to lose money, paying $814 a month in maintenance fees.

In a statement, Living Choice said pets were not banned.

"It is important that consent to keep a cat or dog is obtained but permission is not unreasonably refused," it said.

"This enables the village to monitor the ability of the resident to keep and look after a pet, to understand the rules of keeping a pet and to limit the number of pets a resident has at any one time."

Asked about residents losing more than half their money when they leave the village, Living Choice said potential residents were fully informed in disclosure documents "and receive advice prior to entering a Living Choice Village and they and their families assess the value proposition of the financial costs versus the lifestyle and health benefits a Village Life provides".

Claustrophobic clauses?

It's not just the financial costs of the contracts. Some residents complain they are restrictive.

In another village on Sydney's north coast, run by a different operator, a 73-year-old resident who lives alone with her cat said that moving in was the biggest mistake of her life.

The woman, who asked that she and her village not be identified due to fears of retribution, alleged that clauses in these contracts were used to intimidate residents.

She experienced it firsthand when she complained to the village manager about a staff member arriving unannounced at her property, despite repeated requests for advance notice.

The village manager acknowledged the complaint, then threatened to breach her on a matter the staff member had raised of a "lingering odour" from the kitty litter in her ensuite.

He proceeded to recite potential breaches of the contract, including the maintenance and repair obligations, which required residents to "keep your premises clean, free from rubbish, well-maintained and in a state of good repair", as well as another section under which "we are obliged, and you are obliged, to provide a safe workplace for our staff".

At yet another village run by another operator, a contract says: "At our request, you must have your care needs assessed by a health care professional we specify, so that we can ensure your premises and the village continue to be suitable for you."

Other contracts include clauses that ban pets or determine the type of pet allowed, whether by banning cats, puppies or everything except fish or by allowing pets but only with permission that can be revoked "if the pet is a nuisance, in which case you must remove the pet from the village".

At Tranquil Waters, residents are promised a setting that is "serene and wonderful, yet also provides for an active life at the amazing leisure centre".

But, according to the Green family's 2013 contract, "no cats or puppies are allowed".

On its website, the village narrows down what's allowed even further.

Another village contract says residents can't install garden decorations without consent.

Another says: "You may install garden decorations if you have our prior consent, but must not plant anything in your garden area that we consider is inappropriate or unsuitable."

Some contracts even have a clause that playing a musical instrument might be too loud and is therefore banned.

Gaslit and patronised by managers

Retirees have told the ABC that the power imbalance becomes apparent when there is a disagreement or a complaint is lodged.

This is backed up by a survey of NSW residents conducted by the Retirement Village Residents Association last year, in which almost a third of those surveyed said they had been patronised.

More than 70 per cent of residents who reported being patronised said management was to blame.

One resident in a NSW retirement village said they made a complaint about dust and received a letter from management that they believed was a way to silence them.

"It has been noted that you are not happy living within a Village. I understand people's expectations change as time passes and you may be more comfortable in a different environment. Our staff can assist should you wish to explore this as an option," the letter read.

A resident at Serene Living in Tweed Heads, NSW, said complaints were treated with dismissal, contradiction or gaslighting. She said one resident was yelled at.

Some residents and management at Serene Living are currently at loggerheads over the choice of auditor for the annual accounts. Under the law, residents approve the auditor. This year, the residents decided to vote for a new one after discovering some concerns with the standard of the previous set of accounts.

One resident, who asked not to be named, said when management discovered a new auditor had been approved to do the accounts, they pushed back with a series of emails and a letter to residents that read: "For nearly 10 years we have enjoyed a harmonious village atmosphere which has made us extremely proud," then added: "Unfortunately it is disappointing to see some residents creating division of this peaceful environment."

In a statement, Serene Living said the allegation residents had been dismissed, contradicted or gaslit was "untrue".

"Serene Living takes all complaints seriously. This is a very broad accusation without any specific details."

Asked about the letter it sent to residents regarding their choice of auditor, it said: "This is an excerpt out of one letter and taken out of context could be misleading.

"Our detailed objection to the initial resident proposed auditor was provided to all residents in full and after receiving this information our residents voted to approve a different auditor."

Big operator Lendlease has also run into trouble with village accounts.

It has admitted to underfunding the Coastal Waters village budget, near Nowra on the NSW South Coast, by more than $168,000 in 2020.

The underpayment happened because residents were paying costs for villas under development by Lendlease that should have been paid by the property giant.

In a November 2020 letter to a concerned resident of the village, NSW Fair Trading representative Dianne Millington said Lendlease had reanalysed charges on unsold units.

As a result, Lendlease admitted it was "required to remit further funds to the village for the 2020 financial year, for vacant units recurrent charges being the net amount of $168,593", Ms Millington said.

Last year, Lendlease spun its retirement villages out into a separate business called Keyton, which it jointly owns with super fund Aware and Dutch pension fund APG.

In a statement, Keyton said Lendlease paid the $168,593 to the village in December and had strengthened its accounting systems to make sure the problem didn't happen again.

Mr Gannon, from the Retirement Living Council, says the industry has worked hard to reduce the complexity of contracts over the past five to seven years, but admits more needs to be done.

Asked about clauses restricting pets or mandating health checks, he insisted retirement units "are normal homes".

"This sector has been around for 60 years, and these homes do provide wonderful communities for a quarter-of-a-million older Australians living around the country right now," he said.

He said the Retirement Living Council wants its code of conduct made mandatory and has been talking to state governments about greater regulation of the industry.

"What we are calling for right around the country, with every state and territory government, is for simpler contracts," he said.

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