Residents of registered retirement villages are secure despite the collapse of a financier to the sector, the Retirement Villages Association says.Executive director John Collyns said residents would not notice anything with the failure of Vision Securiti
Residents of registered retirement villages are secure despite the collapse of a financier to the sector, the Retirement Villages Association says.
Executive director John Collyns said residents would not notice anything with the failure of Vision Securities.
“Since the Retirement Villages Act 2003 was enacted, all retirement villages must be registered by law and grant an encumbrance to a statutory supervisor ensuring that residents cannot lose their investment,” Mr Collyns said.
As a result of the legislation, all residents in registered retirement villages were protected regardless of the financial position of their developers or financiers.
“In the case of Vision Securities, as we understand that as their depositors were covered under the government’s deposit guarantee scheme, absolutely no member of the public should be affected,” he said.
He added that Vision Securities had been involved in numerous retirement village developments since its inception but it was understood that moves into property development other than retirement villages may have been the catalyst for the difficulties it faced.
Vision Securities was placed into receivership on Thursday, owing close to $30 million. Its directors sought receivership from its trustee, Perpetual Trust, after failing to settle a major loan last week and ongoing concern for the company’s liquidity.
Vision Securities, which has been trading for nine years, has deposits of $28 million from 953 debenture holders. The Treasury has assured all Vision Securities depositers they would be returned 100% of the money they were entitled to under the deposit guarantee scheme.
Treasury director of financial operations Dr Brian McCulloch said eligible Vision Securities depositors would be contacted within six weeks and informed how to claim under the scheme’s terms.
The deposit guarantee does not cover any new deposits or the roll-over of existing deposits after the default of the company.
“The Crown stands fully behind its guarantee commitments, and we expect an orderly process of payment to eligible Vision Securities depositors,” said
Dr McCulloch.
“In circumstances such as this, when the guarantee is triggered, it is important to remember that it is the eligible depositors that are guaranteed rather than the company.”
Perpetual’s head of trust Matthew Lancaster said Vision’s borrowers were finding it increasingly difficult to refinance or repay their maturing loans.
“Vision Securities has concluded that receivership is the best option to protect all investors and to ensure all investors are treated fairly,” he said.
Rod Pardington and David Levin of Deloitte have been appointed as receivers and will send debenture holders a report on their initial findings as soon as possible.
