analytics

What’s the Government doing about retirement legislation?

 22 August 2017

 

The recent Four Corners documentary on retirement villages has spurred Government into action regarding legislative reform.  Aimed at increasing consumer protection and creating greater transparency, here’s some of the changes being proposed:

 

QLD

Earlier this month, Minister Mick de Brenni introduced the Housing Legislation (Building Better Futures) Amendment Bill (2017) Qld into parliament, which includes major changes to both the Manufactured Homes (Residential Parks) Act 2003 (Qld) (MHRP Act) and the Retirement Villages Act 1999 (Qld) (RV Act).

“Greater financial transparency will be required about retirement village funds, budgets and financial statements, and will address resident and consumer advocate concerns about fees and contracts. Residents will also have greater protections around resales and exit entitlements or when there is a change in village operations. A regulation may also impose a requirement about the provision of equipment in a retirement village for public safety” he said.

 

The Bill included the following changes: 

  • Disclosure periods - a 21 day pre-contract disclosure period and a 14 day cooling-off period will now apply. In some circumstances the home owner can waive or reduce these periods providing they have obtained independent legal advice.
  • Disclosure documents - the Public Information Document (relating to retirement villages) and Home Owners Information Document (relating to manufactured home parks) will both be decommissioned. Retirement village disclosure will comprise the village comparison document, prospective costs document and condition report. For Manufacture Home Park disclosure, the Home Owners Information Document will be replaced by a new two-stage disclosure process for entry into site agreements.
  • Behavioural standards – enforceable behavourial standards for scheme operators and residents.

 

Retirement villages and manufactured home parks (or over 50’s lifestyle villages) operate under different legislation.  Some changes are common to both (as above) and there are also some Act specific changes covering the different retirement models.

 

Changes to manufactured home parks

The reforms to the Manufactured Homes Act include limitations on rental increases, banning extra fees around utilities and meter readings and ensuring emergency services and health workers have access to residential parks:

  •  Site rent increase procedures - the increase can only be one basis, and only once a year (which is the same throughout the park)
  • Disputes about site rent increases can result in the appointment of a second valuer at the cost of the park owner
  • Special increases to rent that are an ‘upgrade cost’ will now only require 75% of home owners to agree 
  • Park owners are prohibited from charging administrative fees for what might be regarded as administrative actions, regardless of whether the electricity is actually supplied by the park owner
  • Park owners must prepare an ‘emergency plan’ (including taking steps to ensure that plan can be implemented by home owners and staff)

 

Changes to retirement villages:

  • The introduction of an approved form of retirement village contract
  • A distinction between “reinstatement work” (that the resident is responsible for) and “renovation work” (that the scheme operator is responsible for).
  • Mandatory buy back if the accommodation unit has not sold within 18 months from termination of the residence contract.
  • If a unit has not sold within three months of the termination date, a new valuation of the resale value every three months must be considered or obtained (down from the previous six month timeframe)
  • Redevelopments (which can include an increase or decrease in the size of just one building in a village) are to be approved by residents, unless every resident is given a notice as part of their disclosure
  • When a new operator is proposed (e.g. on the sale of a village), a transition plan must first be approved by the Chief Executive

 

A report to parliament on the Bill is due by 28 September 2017, with the Government promising to have changes in place by the end of the year. 

 

NSW

NSW is also implementing reforms to retirement villages and the Minister for Better Regulation Matt Kean has announced the NSW Government plans:

“This plan will put consumers first by making contracts more transparent, giving residents the tools to compare costs, and cracking down on providers through a compliance blitz.”

 

The package comprises a four-point-plan aimed at protecting retirement village residents from exploitation and mistreatment and includes:

  • an overhaul of the Retirement Villages Regulation 2009, including requiring greater transparency around fees and charges in contracts
  • an online calculator to help prospective residents and their families better understand the estimated costs of living in a retirement village
  • a compliance blitz targeting NSW retirement villages.

 

 “These measures will work to bolster transparency and give current and future retirement village residents the details they need to make the most informed choice,” Ms Goward said.

 

As part of the overhaul, the government plans to conduct an inquiry into the industry, led by Kathryn Greiner AO, to ensure residents have the protections they deserve and that NSW Fair Trading has the necessary powers to ensure retirement village operators are complying with the law.

For more information on retirement villages in NSW visit Fair Trading NSW.

 

Retirement legislation is complex and we strongly recommend you seek legal advice from a lawyer who specialises in retirement living before signing any contracts with villages.   If you are in any doubt, give us a call and we will point you in the right direction.

 

Telephone the Kairos Team on

(07) 3012 6655 or  (02) 8067 8508

 

 Return to blog