THE LAUREL SPRINGS INVESTIGATION
FOR ACCESS TO DOCUMENTS RELATING TO THE INVESTIGATION OF
THE LAUREL SPRINGS RETIREMENT VILLAGE
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FINANCIAL INVESTIGATION
DETAILS OF FINDINGS
Details of Findings
18. Defrauded residents who bought new unit - structure unfit for purpose, and unconscionable exit terms
19. Deceived residents - renaming of Village to Resort

18. Defrauded residents who bought new unit - structure unfit for purpose, and unconscionable exit terms

The scheme operators further defrauded the elderly residents referred to in Finding 17, by selling to them the lease while knowing that, in their role as the developers of the extension of Laurel Springs, they had failed to ensure that the retaining wall, that supports the filled land on which the unit was built, was structurally sound and fit for purpose. The scheme operators knowingly failed to ensure that the wall was constructed in accordance with the approved plans, and failed to comply with relevant essential conditions of approval of the operational works; they failed to ensure that the construction was properly supervised and certified by a geotechnical engineer.

As a consequence, the retaining wall has failed, causing major damage to the unit, making it unsafe to live in. In addition, the scheme operators failed to ensure that the design of a safety fence on top of the wall was fit for purpose and the fence properly constructed, making it useless as a safety fence.

The scheme operators refused to allow the two elderly residents to rescind the lease, and allowed them to exit only on unconscionable terms that were of significant financial disadvantage to the residents.

18.1 The failed development

For details of the failed development, refer to DEVELOPMENT INVESTIGATION -> DETAILS OF FINDINGS -> 5. Non-compliance with approval conditions for village extension.

18.2 Unconscionable exit terms

18.2.1 In September 2020, I met the elderly couple who bought the unit, and visited them several times until early December 2020. I observed them extremely stressed, fearful of their damaged unit, and desperate to leave Laurel Springs,

18.2.2 The negotiations with the scheme operators, to allow the residents to end their lease, dragged on for many weeks. In my opinion, this was a deliberate strategy by the scheme operators to place the residents under as much stress as possible to minimise the amount to be paid to the residents.

18.2.3 In early December 2020, under extreme duress, the residents signed a "Deed of Surrender":

Evidence Document D6.18 - 11

18.2.4 The important points to note about the deed are:

  • of the $325,000 the residents paid for the unit, they receive back a total of only $305,000.
  • of the $305,000, only $200,000 is paid to the residents within 14 days of vacating the unit.
  • the remaining $105,000 is paid when the unit sells or in 12 months, whichever is sooner, so it will be 12 months because the unit will never sell; the retaining wall supporting the fill on which it is built has failed.
  • the residents are gagged; they are bound by egregious Confidentiality terms.

18.2.5 In my opinion, the terms of the "Deed of Surrender" are unconscionable, and the conduct of the scheme operators amounts to fraud.

18.2.6 I did not obtain a copy of the Deed from either of the two residents who signed it, and did not inform them of my intention to publish the document. The two residents are therefore not in breach of any part of the Confidentiality term of the Deed.

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