Retirement Villages legislation review 2013 - 2016

This page is for: 
SeniorRetirement village owner / operator

Status: Closed 15 July 2013 

Updated: 1 April 2016

The Consultation included a wide ranging and comprehensive review of retirement village legislation over the past few years that heavily involved both residents and industry representatives. The aim of the reforms is to provide greater protection to seniors who choose to live in retirement complexes while at the same time balancing the needs of the industry by giving fair and clear guidelines for village operators.

Background

Since a comprehensive review of retirement village laws was completed in November 2010, a substantial body of work has been undertaken to implement some of over 100 recommended reforms for change.

The first stage of reforms in the Retirement Villages Amendment Act 2012 commenced on 1 April 2014 and together with some changes to the Retirement Villages Regulations 1992 (RV Regulations) implemented a number of important consumer protection reforms.

Changes to the RV Regulations reflected in the Retirement Villages Amendment Regulations 2015 and to the Code of Fair Practice for Retirement Villages reflected in Fair Trading (Retirement Villages Code) Regulations 2015 will be implemented later in 2015.

The final piece of first stage reforms are two new disclosure statements that must be given to prospective residents at least 10 working days before being asked to sign a contract. These regulations which commence on 1 April 2016 are found in the Retirement Villages Amendment Regulations 2016. 

Residents and industry stakeholders have made a significant contribution to new retirement village laws in Western Australia.

Update bulletins

Update bulletins were produced to keep stakeholders up to date on the review process and implementation.

Changes to the law

There were three packages of changes to finalise stage 1 reforms: 

How changes affected residents

Retirement Village laws were updated, throughout 2014 to 2016, to address some of the issues raised in a comprehensive reform of retirement villages legislation.  
 

Prospective residents - disclosure statements

Since April 2014, prospective retirement village residents must be given a comprehensive disclosure document (Form 1 or Form 1A) at least 10 working days before they sign a residence contract.
 
Form 1 applies to residence contracts where a 'premium' is paid to secure the right to live in a particular unit in a retirement village.  It includes the purchase price for a unit in a strata or purple title village as well as the entry payment for a lease village but does not include a payment of $1500 or less paid to secure a lease of 12 months or less.
 
Form 1A applies to residence contracts with a term of 12 months or less for which an initial amount of $1,500 or less is payable.
 
 

Residence contracts

Since 1 October 2015 all retirement village contracts are required to address a range of mandatory matters or provisions and are prohibited from including some matters or provisions.
 
Mandatory matters
Contracts must include:
 
  1. specific information about the fees and charges a resident will pay across the term of the contract;
  2. details about personal services, communal services, personal amenities and communal amenities the resident will receive or have access to if they move into the village; and
  3. a copy of the termination schedule approved by the Commissioner for Consumer Protection. 
Prohibited matters
Contracts must not include provisions which:
 
  1. require residents to give the operator (or a close associate of the operator) a power of attorney.
  2. do not calculate exit fees on a daily pro rata basis.
Mandatory matters only apply to contracts entered into on or after 1 October 2015 with three exceptions (relating to urgent repairs, variations in communal amenities and variations or the introduction of new communal services). While the prohibited provisions commenced on 1 October 2015 they apply to all residence contracts and any prohibited provisions in existing residence contracts will be void by virtue of section 14A(4) of the Act so variations to existing contracts will not be required. Operators may opt to vary contracts to remove any prohibited provisions but this is not a requirement of the legislation. If any residents are asked to sign a new contract or to agree to variations to their existing contracts they should call the Advice Line on 1300 304 054 for further information. 
 
The existing requirements have also been strengthened in relation to:
 
  • proposed budgets, quarterly and annual financial statements, both for the operating account and for any reserve fund they contribute to (these requirements apply from the 2016/17 financial year). 
  • the information residents receive about proposed refurbishment of the residential premises after a resident has left the village.
  • limiting a former non-owner resident’s liability to pay recurrent charges after they permanently vacate a village. This provision commenced on 1 April 2014.

Changes to the code

The previous reform of the code resulted in:
  • Provisions increasing the consistency and transparency of financial reporting in relation to village operating and reserve funds by specifying line items for the operating budget, reserve fund budget, and quarterly and annual financial statements to clarify the minimum level of information to be disclosed. These provisions apply to existing retirement villages from the 2016/17 financial year onwards.
  • Including a more thorough refurbishment process for residential premises in the retirement village to increase transparency and accountability for the amounts residents are charged prior to and during any refurbishment of the premises that they occupied. This includes a right for the resident or their representative to:

        - be provided with a written statement of all refurbishment work to be carried out including costings

        - dispute proposed refurbishment works and/or

        - inspect any refurbishment works prior to paying any money.

  • Extending the State Administrative Tribunal’s existing jurisdiction to deal with refurbishment disputes.
  • Inserting capacity for residents to confer the functions of a residents’ committee on an incorporated association.
  • Inserting Secret ballot provisions by which residents voting at a meeting of residents can elect to vote by secret ballot.
  • Provisions to ensure costs are shared between the parties to a dispute to which the resolution process in the Code applies or that is referred to mediation by the Commissioner for Consumer Protection.

Further information

Consultation
More information about the current consultation for stage two reforms is available from the Retirement village law reforms 2019 page.

 

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