Significant changes to the Retirement Villages 1992 Act (RV Act) were put in place prior to 2016 as a result of the stage one review.  Many of these changes focused on providing the consumer with more information when deciding whether to enter into a retirement village agreement in Western Australia.

Despite the reforms, some problems have persisted including consumers continuing to enter into contacts without fully understanding their legal rights and obligations. Since stage one of the review further matters have arisen, and these issues are now being considered as part of the second-stage review.

As there were a large number of issues to be consulted on, the outstanding matters were grouped in categories to deal with common issues and themes. 

This first CRIS 1 paper of the second stage of review of the RV Act focused on improving:

• the definition of a retirement village product;
• how it is advertised and promoted; and
• and how consumers understand the pricing structure.

The aim of reform in this area is to further increase transparency, enabling consumers to better understand their rights and obligations before signing up for residency in a retirement village.

The CRIS 1 paper reviews key definitions in the RV Act, such as ‘retirement village’, ‘residence contract’ and ‘retirement village scheme’.  Proposals are made to amend the legislation to provide a unified statement of the retirement village product that includes the right to occupy and the provision of amenities and services in a managed community.

The CRIS 1 paper focused on advertising and promotion of the retirement village product.  Consumer Protection considers there is sufficient evidence showing that residents understand the retirement village product to be like a residential housing purchase.  Proposals made include amendments to the retirement village legislation to provide more specific information about tenure and accommodation that is provided in a managed community.

Despite stage one reforms requiring pre-contract disclosure of all retirement village fees and changes, complaints received by Consumer Protection indicate consumers continue to misunderstand the retirement village product price.  Consumers misunderstand both the upfront payment, or the upfront payment and recurrent charges alone as the price, and have difficulty in working out what the total price will be from the deferred management fee pricing structure. Further proposals are to amend the legislation to assist consumers in more fully understanding the price structure of the retirement village product. This also includes requirements for comparative tables to allow residents to compare retirement village products.

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