Class action lawsuit against retirement home giant Aveo to open

One of the country’s largest operators of retirement homes, Aveo Group, is facing a looming class action lawsuit from residents and their families alleging retirees have been financially harmed by the company’s contract and fee arrangements.

The class action, which could affect thousands of residents and was more than five years in the making, will begin in Melbourne federal court in March.

It is defended by the retirement village operator, previously listed on the ASX but now owned by Canadian investment giant Brookfield Asset Management.

The law firm Levitt Robinson’s case, touted as Australia’s largest class action lawsuit against a retirement home operator, alleges misleading or deceptive conduct alongside unscrupulous conduct.

It stems from a joint 2017 investigation by The Sydney Morning Herald and The Age and Four Corners that found Aveo engaged in practices that included resident churn, fee reductions and misleading marketing promises.

The case revolves around new housing contracts introduced in many Aveo villages beginning in 2015, dubbed the Aveo Way. The changes included a shift to Aveo, which offered new residents 99-year leases on retirement units, rather than title deeds that some existing residents held.

It is alleged that residents who sold their Aveo units under the program suffered financially as a result of the Aveo Way program. The lawsuit also targets fees charged by Aveo.

US-based firm Galactia Litigation Partners, which is funding the case, said the Aveo Way policy includes a 35 percent deferred administration fee that accrues over three years.

Lisa Boler, Galactica’s Director of Litigation for Australia, said: “It is alleged that there has been misrepresentation from subsidiaries of Aveo Group Limited stating that if residents sell their units, there will be no financial disadvantage from participating in the Aveo Way program. That’s supposed to be pretty wrong.”